Digital Legal MegaUpload Timeline

Mega chief refused bail for a second time

By | Published on Friday 3 February 2012


The New Zealand courts have refused MegaUpload founder Kim Schmitz bail for the second time. The Mega chief was initially refused bail last week on the grounds he may flee if let out of jail, but he appealed earlier today, his lawyers arguing he had neither the inclination nor the means to leave the country. But the New Zealand courts remained cautious.

Schmitz was one of four Mega execs arrested in New Zealand at the request of the US authorities last month, charged with mass copyright infringement, money laundering and racketeering via the various Mega businesses. Some of the accused were bailed, but the prosecution said they feared Schmitz, possibly utilising criminal connections, might attempt to return to his home country of Germany, where it would be much harder for America to extradite him.

According to Reuters, in the appeal hearing Schmitz said that, with his assets seized and company shut down, he simply didn’t have the means to flee, while adding: “I will not run away. I want to fight these allegations on a level playing field. I have three little children. My wife is pregnant with twins. I just want to be with them”.

But the prosecution successfully persuaded the judge that the Mega chief was indeed a flight risk, speculating that he may have secret funds he could tap into, and noting his past record, and allegations he fled to Thailand to dodge insider trading charges in Germany. Schmitz will now stay in jail until at least 22 Feb while the US goes through the motions of extraditing him and the other accused former Mega executives.

Elsewhere in Mega news, Torrentfreak has reported that the authorities in Hong Kong are making much of the support they gave American investigators as they gathered evidence against the Mega enterprise. Seemingly Hong Kong is keen to show it is ready to be tough in tackling intellectual property infringement, and in stopping online operations of suspect legality which attempt to put themselves out of the reach of Western courts.

The Mega empire was officially based in Hong Kong, and Schmitz sang the praises of the Chinese special administrative region late last year, telling Torrentfreak: “Hong Kong, what an awesome place to do business – people there leave you alone and they are happy for your success”. As it happened, by that point the Hong Kong authorities had been involved in investigations into Schmitz’s business affairs for the best part of a year.

According to the FT, as well as boasting of their collaborative work with the US to “smash a transnational cyberlocker syndicate”, the Hong Kong authorities are planning on launching a new “electronic crime investigation” centre to aid any future similar investigations. Other digital locker services based in Hong Kong that have also been accused of enabling copyright infringement by Western content firms, and there are quite a few, might soon be looking for new bases.