Megaupload co-founder Kim Dotcom has been denied an appeal for bail by the High Court in Auckland, New Zealand, on fears that he would flee to Germany, where he would be protected from extradition to the US, reports the BBC. He was originally denied bail on January 25. Dotcom has been accused of knowingly distributing copyrighted material illegally, and profiting from that distribution through the sale of advertising on Megaupload and other Web properties.
Dotcom — formerly named Kim Schmitz — has been deemed a severe flight risk due to the fact that he has multiple passports, bank accounts in three names, and a history of fleeing the law. An offer by Dotcom’s lawyers to have their client tracked electronically was also denied because the court thought Dotcom’s background would allow him to evade such a tactic. Dotcom denied allegations that he was a flight risk, saying he simply wanted to be with his pregnant wife, and attempt to unfreeze his assets.
Dotcom’s world came crashing down on January 19, when the US government seized Megaupload and all its related properties, and arrested four Mega executives in New Zealand. While Megaupload is officially registered in Hong Kong, the site used servers located in Virginia, which technically put it under the jurisdiction of the US. Copyright holders have claimed $500 million in lost revenue due to Megaupload, according to the indictment. Due to the site’s popularity, the company allegedly brought in more than $175 million in profit from advertising and premium membership fees.
Despite fears that legitimate (i.e. non-infringing) user data stored with Megaupload would be deleted, Cogent Communications and Carpathia Hosting, both of which provided server space for Megaupload in the US, have promised not to erase the data until at least the middle of February. The Electronic Frontier Foundation is currently offering free legal services to Mega users who lost access to their data due to the seizure, in an attempt to help them retrieve their files.
Dotcom will appear in court again on February 22, when his extradition hearing will begin. According to Dotcom’s lawyers, they plan to fight the application to extradite him to the US.