Even in the wake of the now-infamous raid on his New Zealand mansion and the seizure of millions in assets, somehow Dotcom has managed to rake in millions. Or did he also have some stashed away?

It’s an important matter for Hollywood. The businessman’s continued lavish lifestyle diminishes the financial pot from where any payout will be made should they prevail in their copyright infringement battles against the Megaupload founder.

The studio’s concerns were previously addressed by Judge Courtney, who had already ordered Dotcom to disclose to the Court the details of his worldwide assets. The entrepreneur filed an appeal but that hearing would take place in October, a date beyond the already-ordered disclosure date.

Dotcom took his case to the Court of Appeal in the hope of staying the disclosure order, but in August that failed.

Dotcom complied with the ruling and subsequently produced an affidavit. However, he asked the Court of Appeal to overturn the decision of the High Court in order to keep the document a secret from the studios. That bid has now failed.

Following a ruling handed down this morning by the New Zealand Court of Appeal, Dotcom’s financial information will soon be in the hands of adversaries Twentieth Century Fox, Disney, Paramount, Universal and Warner Bros.

Court of Appeal Judges John Wild, Rhys Harrison and Christin French ordered the affidavit to be released to the studios on the basis that the information could only be used in legal proceedings concerning the restraining of Dotcom’s assets. And with a confidentiality clause attached to the affidavit, the public will not gain access to the information.

Another setback for Dotcom came in respect of who pays the bill for proceedings. The Megaupload founder’s attempt at avoiding costs was turned down after the judges found that having already supplied the affidavit as required, Dotcom’s appeal was not likely to succeed.

And there was more bad news for Dotcom in a separate High Court ruling handed down in New Zealand today. It concerns the extradition cases against not only him but also former Megaupload associates Finn Batato, Mathias Ortmann and Bram Van Der Kolk.

The theory put forward by Dotcom is that the United States and New Zealand governments had politically engineered his downfall in order to extradite him to the U.S. To gather evidence showing how that happened, Dotcom and the other respondents made a pair of applications to the extradition court (the District Court) requesting that it make discovery orders against various New Zealand government agencies, ministers and departments.

The District Court declined so the respondents sought a judicial review of that decision claiming that the Court acted unfairly and erred in law. In today’s ruling, Justice Simon France said there was no “air of reality” that political interference had been involved in Dotcom’s extradition case.

“It is, as the District Court held, all supposition and the drawing of links without a basis,” the Judge wrote.

“Nothing suggests involvement of the United States of America, and nothing suggests the New Zealand Government had turned its mind to extradition issues. These are the key matters and there is no support for either contention.”

Judge France said that as respondents in the case, the United States were entitled to costs.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

It is this ability to attract attention that undoubtedly played a key role in his creation of the Internet Party, a political movement with a stated aim to shake up New Zealand politics and put Dotcom-affiliated politicians in Parliament.

Last month, however, the elections failed to go as planned. The Internet Party conceded defeat without winning a single seat, with its founder honoring tradition by politely congratulating Prime Minister and arch-rival John Key on his success.

After endless appearances and endless daily tweets, Dotcom essentially disappeared from public life, only breaking his silence to comment on the video game Destiny and his exit from Baboom. Today we catch up with the controversial entrepreneur to find out what happened.

“Baboom is this great idea of unchaining the artists from major record labels, allowing them to deal directly with their fanbase and using groundbreaking new ways of monetization that pay artists even when fans access content for free,” Dotcom told TF.

“But Baboom is facing tough opposition from the labels. Baboom has had to deal with unfair and deliberate efforts to make us fail. I won’t go into details.”

Dotcom says that for the sake of the artists he wants Baboom to succeed. But, in order for that to happen, a sacrifice needed to be made.

“The best way to achieve that success was to take me out of Baboom completely. We have a great management team and some brave investors in place. The brand ‘Kim Dotcom’ is toxic and a major distractor to what Baboom is trying to achieve,” he concedes.

While sometimes problematic, Dotcom’s branding is clearly a double-edged sword, one only needs to look at the 2012 launch of Mega.co.nz to see that. On the tiniest of budgets, Dotcom managed to rally the world’s press to witness the launch of his new cloud-storage site. And without him it’s doubtful that Baboom would’ve achieved the profile it has today.

But while those same strengths allowed the Internet Party to became a news event every day leading up to the election, Dotcom’s profile and history – by his own admission – became a millstone around the party’s neck. Every aspect of his private life became a point of leverage for his political opposition.

“The Internet Party failed to deliver meaningful change in New Zealand at the last election because of the media spin by our opponents,” Dotcom says.

“They have successfully turned me into a villain, a German Nazi, a horrible employer, a political hacker, a practitioner of prohibited digital voodoo magic and nothing short of a monster. I would hate that guy too if I didn’t know that it wasn’t true.”

Dotcom says that part of the problem is that he has powerful enemies who in turn have friends in positions of influence, including in the press.

“When you have the US Government, the NZ Government, all Hollywood studios and all major record labels fighting against you, you don’t have a lot of friends, especially in the media,” Dotcom says.

“They either own the media (like in the US) or control the media with their significant advertising spending. Their passion to destroy me and everything I do, because of a copyright disagreement, is almost as fanatical as some of the religious extremism I see on TV.”

So with the election over, and maybe even Dotcom’s entire political career with it, the entrepreneur still has huge adversity to overcome. As he cuts Baboom free and wishes the company every success, Dotcom thoughts and energies turn to his pending extradition case. He knows it’s not going to be easy, especially given the mauling he received at the hands of New Zealand’s political heavyweights in the run up to the election.

“If I was a judge in New Zealand I wouldn’t think too highly of ‘Kim Dotcom’ after months of prime time media bashing by the Prime Minister personally and his media helpers,” Dotcom says.

“John Key constantly made the Internet Party and its goals for Internet Freedom about my extradition case and he accused me of attempting to subvert the New Zealand judiciary. He basically told the judiciary every day that I’m a selfish, criminal man who ‘has to go away’.”

While Dotcom insists his motives were altruistic, there can be little doubt that if the election had gone his way the words of John Key and friends might have meant just that little bit less. As it stands, things went pretty badly.

The details of that extradition fight will become clear during the months to come, but in closing Dotcom shared with us an interesting development.

“After 1000 days of waiting we finally got access to our own data (copies of our personal computers / hard drives). Remember, the Government made us wait this long for a single reason only: They demanded access to our encryption codes,” he says.

“But here’s the twist: It turns out that the Government had access to the encryption codes all along. Who would have thought that they didn’t install a trojan on my computer while they had the GCSB / NSA spying on me.”

Kim Dotcom’s extradition hearing is currently scheduled to take place in February 2015. Expect the media circus to get going again soon.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

In addition to being the first Dotcom collection distributed commercially, the album was also notable for soft-launching Baboom. The fledging music service was to provide the platform for the entrepreneur’s assault on the major label-controlled recording business.

From the beginning Baboom’s stated aim was to disrupt the music industry by closing the gap between artists and fans, rewarding the former with most of the profits. The latter would be put in a win-win situation via free ad-supported music streaming.

The one constant that remained throughout was Kim Dotcom himself, a person with whom the service was inextricably linked, both financially and from branding and marketing perspectives. Today, however, that has all come to an end.

According to a new Particulars of Shareholding document filed this morning, Coatesville Trustee Services Limited – Dotcom’s family trust – has sold all of its shares in Baboom.

Before the sale Michael Sorensen’s Vig Limited, which also holds 13044 shares (9.97%) in Mega.co.nz, held 45% of Baboom’s shares. Company documents reveal that Vig now owns 90% after Dotcom’s family trust shares were transferred to the company.

As can be seen above, the remaining 10% is held by Xavier Buck of Dicé Invest. In November 2013, Buck, who is also a director at Domaintools, said he would be heading up MEGA Europe.

Perhaps the most curious element of Dotcom’s exit from the business is the language being used by Baboom chief executive Grant Edmundson. While he wishes the Baboom founder well, a single sentence distances Dotcom from the company in every possible way.

“The transaction means Dotcom no longer has any equity or role in Baboom, nor any relationship with the company,” Edmundson said.

“Kim is moving on to focus on other projects and both camps wish each other well with future plans.”

TorrentFreak spoke with Edmundson and asked if Dotcom’s exit from the company had been his choice alone, Baboom’s, or by mutual agreement. He told us that he would not comment on matters between shareholders. However, when questioned on whether Baboom’s brand would be affected by the departure of its founder, Edmundson was more forthcoming.

“In terms of the impact on Baboom, my view is that the Baboom service will now be able to be judged on its own merits rather than being assessed on the brand equity (or otherwise) of its shareholder base,” the Baboom CEO said.

Kim Dotcom did not immediately respond to a request for comment.

Baboom is currently trying to raise US$3.98m (NZ$5.05m) and a listing on the Australian Securities Exchange. The company sought to raise the funds from investors in return for 11.5% of its shares with the offer closing in July, but that deadline was amended to make it open-ended.

Baboom is scheduled to debut in the fourth quarter of 2014, although no firm launch date has been provided by the company.

Update: Kim Dotcom has taken to Twitter:

Good bye @Baboom. I was holding u back. The music industry hates me. You'll do better without me. Good luck my love. http://t.co/eByCsUizmR

— Kim Dotcom (@KimDotcom) October 2, 2014

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

An official copy of the album was posted on the cloud hosting service Mega, which is linked from Dotcom’s homepage. This has never caused any issues, until a few weeks ago, when various copyright holders started sending unusual takedown requests to have the content removed.

IFPI, representing the major music labels, submitted several DMCA notices to Mega claiming that the file infringed the rights of various artists. This resulted in a game of whack-a-mole in which the album was removed and reinstated a few times. Currently it’s unavailable yet again.

When we previously covered the issue, Mega stressed that the takedown requests were clearly mistaken. The company accused IFPI of not doing their homework and doubted the accuracy of their notices in general.

However, since the takedown notices kept targeting the same link, there was a good chance that these mistakes were orchestrated in some way. Assuming that someone was making IFPI and others believe that the link pointed to albums of other artists, we decided to do some research.

Eventually we stumbled upon a series of Pastebin pages where the URL of Dotcom’s album is linked to titles of other artists. Several of the artists mentioned in the pastes are the same as the one’s IFPI listed in their DMCA notices, so this would explain the mistakes.

The above is concerning for several reasons. First of all, it shows that IFPI and others don’t verify the legitimacy of their takedown notices. This means that pranksters can easily get them to censor legitimate content.

Secondly, Mega usually can’t check the validity of a claim, or it simply doesn’t know whether or not a user has permission to publish it. So they have very little options to stop the abuse.

“Mega aims to process all takedowns promptly, within a few hours. It is impossible to verify the claims as the files are encrypted so we don’t know the contents (unless the full link is provided with the key included), and we can’t verify if the person has a valid ownership/license or not,” a Mega spokesperson told us.

Despite these restrictions, the cloud hosting provider says it’s setting up a system where repeated takedowns can be flagged to prevent this type of abuse in the future.

“We are improving our systems to monitor the takedown process and will eventually be able to identify repeated incorrect notices,” Mega says.

Until then, Dotcom’s album will most likely disappear from Mega a few more times. Luckily for the fans, there’s also a copy hosted on the soon-to-be-released music service Baboom.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

The Internet entrepreneur could not run for election himself, but as the party’s president and visionary he would gain significant political power.

Today New Zealanders went out to vote and the Internet Party was listed on the ballots in an alliance with the Mana Party.

Voting booths officially closed at 7 PM local time and the provisional results show that Internet Mana failed to win a seat.

The party managed 1.26% of the total vote, somewhat short of the 5% required to enter the New Zealand Parliament. A disappointing result after Dotcom spent more than $2 million on the party and its election campaign.

Over the past several weeks Internet Mana received a lot of attention in the press. Dotcom actively campaigned against his arch-rival Prime Minister John Key, and earlier this week the party organized the “Moment of Truth” during which Edward Snowden, Glen Greenwald and Julian Assange all criticized New Zealand’s secret spying efforts.

Despite the heavy critique of the Prime Minister, Key’s National Party became the overwhelming winner of the elections with nearly half of all votes.

Following the defeat Dotcom apologized to Mana leader Hone Harawira and the Maori people. Mr Harawira lost his Parliament seat and Dotcom suggests that he may be to blame for the disappointing result.

“I take full responsibility,” Dotcom said in a short speech. “The brand Kim Dotcom was poisoned … and I did not see that before the last couple of weeks.”

After his speech Dotcom left the building, declining interview requests from local reporters.

In a tweet Dotcom later congratulated the Prime Minister and his National Party on their win.

“New Zealanders have chosen National and John Key to lead. I congratulate the Prime Minister. Please do your best for all Kiwis. Good luck,” he wrote.

Responding to the results Internet Party leader Laila Harre said that the party’s policy went unreported in the media, which mostly focused on scandals and the dirty games being played.

Harre thanked Dotcom for the opportunity to shake up New Zealand politics. She said that Dotcom became the symbol of Internet Mana, but that the party likely underestimated the impact this would have on the campaign.

“There’s been a two-year campaign of vilification of Kim and that was clearly impacted on our campaign,” Harre noted.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

That’s why the news today that the ruling National Party is being sued for copyright infringement has somewhat amused the German-born businessman. The party is led by political rival Prime Minister John Key, one of Dotcom’s most vocal critics and a leader who the Megaupload founder says played a key role in having him arrested in 2012.

The lawsuit, filed by Eminem’s publishers, follows allegations that the song “Lose Yourself” was used in a 2014 New Zealand General Election advertising campaign run by the National Party.

Eight Mile Style and Martin Affiliated told local media that Eminem’s publishers were not approached to use the songs.

“It is both disappointing and sadly ironic that the political party responsible for championing the rights of music publishers in New Zealand by the introduction of the three strikes copyright reforms should itself have so little regard for copyright,” the publishers told 3News.

“We do not hesitate to take immediate action to protect the integrity of Eminem’s works, particularly where a party, as here, has sought to associate itself with Eminem and his work.”

The National Party insists that it obtained all necessary licenses by purchasing the track from official sources known to work with the film and entertainment industry. However, in order to try and calm down the complaint by the publishers use of the song by the party was withdrawn two weeks ago, an unusual thing to do if money had indeed been invested in a legitimate license.

“We think it’s pretty legal, we think these guys are just having a crack and have a bit of an eye for the main chance because it’s an election campaign. I think they’re just trying to shake us down for some money before the election,” said National’s campaign manager Steven Joyce.

While “pretty legal” probably isn’t the standard required by Eminem’s publishers, Kim Dotcom was already made up his mind on how to end the dispute. Posting on Twitter, the Internet Party founder didn’t let a golden opportunity pass to take a shot at his arch political rival.

“Extradite John Key,” he wrote.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

The raid on Dotcom’s Coatesville mansion was requested by United States authorities who are now trying to extradite the Megaupload founder and several of his colleagues.

Despite protests from Dotcom about the legitimacy of the search warrants, the raid was found to be legal earlier this year. However, that doesn’t mean that all seized property was taken legitimately, and can be kept from the New Zealand-based entrepreneur.

Today the New Zealand Court of Appeal ruled that clones of the seized electronic devices that were seized without authorization should be returned to Dotcom and his co-defendants “as soon as reasonably practicable.”

Last month the prosecution explained that the data hadn’t yet been handed over because some of it was encrypted, making it impossible for police to verify and investigate its contents.

In its ruling today, the Court of Appeal respects this hesitation but noted that all non-encrypted data should be returned. The rest can follow after the defendants give up their encryption passwords to two nominated police officers.

Previously the Court of Appeal ruled that police crossed a line when they shared cloned data with the United States. In a reference, today’s order prohibits the two police officers from revealing the encryption passwords with others.

“[...] in particular to any representative of the government of the United States of America,” the verdict reads.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Since then the case hasn’t progressed much. Kim Dotcom’s extradition hearing has been delayed until 2015 and most of the recent court proceedings dealt with how the seized assets should be handled.

Dotcom tried to regain his possessions but this effort failed last month. Meanwhile, both the MPAA and RIAA have protected their claims on the Megaupload millions, and now the U.S. Government has joined in as well.

In a complaint submitted at a federal court in Virginia the Department of Justice asks for a forfeiture of the bank accounts, cars and other seized possessions, claiming they were obtained through copyright and money laundering crimes.

The filing starts with a brief summary of the indictment that was brought against Dotcom and his colleagues. According to the Government, Megaupload was a criminal organization set up to profit from copyright infringement.

“The members of the Mega Conspiracy described themselves as ‘modern day pirates’ and virtually every aspect of the Mega Sites was carefully designed to encourage and facilitate wide-scale copyright infringement,” the U.S. attorney writes.

The Government wants the seized properties to be handed over to the authorities, and claims it’s permitted under U.S. law. This includes the bank account that was used by Megaupload for PayPal payouts.

The account, described as “DSB 0320,” had a balance of roughly $4.7 million (36 million Hong Kong Dollars) at the time of the seizure, but processed more than $160 million over the years.

“Records indicate that from August 2007 through January 2012 there were 1,403 deposits into the DBS 0320 account totaling HKD 1,260,508,432.01 from a PayPal account. These funds represent proceeds of crime and property involved in money laundering as more fully set out herein,” the complaint reads.

More than a dozen bank accounts are listed in total including some of the property they were used for to buy.

The list of assets further includes several luxury cars, such as a 2011 Mercedes-Benz G55 AMG with a “Wow” license plate, TVs including a 108″ Sharp LCD TV and artwork in the form of Olaf Mueller photographs.

The Government claims that the possessions can be forfeited since they were obtained through criminal copyright infringement and money laundering, but Megaupload’s lawyer Ira Rothken disagrees.

“Kim Dotcom and Megaupload will vigorously oppose the US Department of Justice’s civil forfeiture action,” Rothken tells TF.

“The DOJ’s efforts to use lopsided procedures over substance to destroy a cloud storage company is both offensive to the rights of Megaupload and to the rights of millions of consumers worldwide who stored personal data with the service,” he adds.

According to Rothken the U.S. ignores several crucial issues, including the Sony Doctrine and the fact that criminal secondary copyright infringement no longer exists.

“The DOJ’s forfeiture complaint ignores the US Supreme Court’s protection called the Sony Doctrine provided to dual use technologies like cloud storage, ignores substantial non infringing uses of such cloud storage including by DOJ users themselves, and ignores the fact that Congress removed criminal secondary copyright infringement from the copyright statute in 1976,” Rothken says.

Which side the District Court judge will agree with has yet to be seen, but with so many parties claiming their cut of the Megaupload assets it’s certainly not getting easier for Dotcom to reclaim his property.

To be continued.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Considering the controversial reputation of its predecessor Megaupload, copyright holders have been keeping a close eye on the site. Thus far, however, the number of takedown requests received by the company has been relatively small.

Perhaps not completely unexpectedly, among the takedown requests that do come in are many that wrongfully request the takedown of perfectly legitimate files. This was illustrated earlier this week when Kim Dotcom’s official album Good Times was removed following a complaint.

The album was released by Dotcom earlier this year and he has been sharing it via his website ever since. The link in question points to Mega where people can download it for free, but a few days ago it suddenly disappeared.

To find out why the album was removed we contacted Mega for an explanation. The company informed us that music industry group IFPI requested the removal of Dotcom’s album through a takedown request sent on September 1.

Representing the major record labels, IFPI claimed that the link infringed on the copyrights of one of their artists. IFPI listed several musicians but Kim Dotcom was not one of them.

“It’s clearly an incorrect takedown request,” Mega’s Chief Compliance Officer Stephan Hall tells us.

TorrentFreak also contacted Kim Dotcom, who asked Mega to reinstate the album, which they did. All in all the album was unavailable for about a day.

While a mistake is easily made, this is not the first time that IFPI has tried to remove Dotcom’s album from Mega. A similar request was sent on August 18, this time claiming that it was a copyright infringement of Kimbra’s “The Golden Echo.”

IFPI’s actions have been sloppy, to say the least, and Mega’s Chief Compliance Officer has little faith in the accuracy of the music group’s other takedown requests.

“This is an indication that someone at the IFPI is not doing their homework and that their takedown notices in general cannot be trusted,” Hall tells TorrentFreak.

Unfortunately these kind of mistakes are not an isolated incident. For example, before Kim Dotcom’s Megaupload was shutdown early 2012 the site received many erroneous takedown notices.

“During the Megaupload days over 20% of all takedown notices were bogus,” Dotcom told us previously.

“We analyzed big samples of notices and most were automated keyword based takedowns that affected a lot of legitimate files. The abuse of the takedown system is so severe that no service provider can rely on takedown notices for a fair repeat infringer policy.”

A policy to punish copyright holders who make repeated mistakes, on the other hand, might be worth considering.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

They believe that legal action currently underway against the Megaupload founder could lead to them receiving a sizable damages award should they win their case. But Dotcom’s lavish lifestyle gives them concerns. The more he spends, the less they could receive should the money begin to run out.

Those concerns were addressed by the High Court’s Judge Courtney, who previously ordered Dotcom to disclose the details of his worldwide assets to his Hollywood adversaries. Dotcom filed an appeal which will be heard in October, but that date is beyond the ordered disclosure date.

As a result, Dotcom took his case to the Court of Appeal in the hope of staying the disclosure order.

That bid has now failed.

Dotcom’s legal team argued out that their client’s October appeal would be rendered pointless if he was required to hand over financial information in advance. They also insisted a stay would not negatively affect the studios since millions in assets are currently restrained in New Zealand and elsewhere.

However, as explained by the Court of Appeal, any decision to stay a judgment is a balancing act between the rights of the successful party (Hollywood) to enforce its judgment and the consequences for both parties should the stay be granted or denied.

While the Court agreed that Dotcom’s appeal would be rendered pointless if disclosure to Hollywood was ordered, it rejected that would have an effect on Dotcom.

“[T]he mere fact that appeal rights are rendered nugatory is not necessarily determinative and in the circumstances of this case I consider that this consequence carries little weight. This is because Mr Dotcom himself does not assert that there will be any adverse effect on him if deprived of an effective appeal,” the decision reads.

The Court also rejected the argument put forward by Dotcom’s lawyer that the disclosure of financial matters would be a threat to privacy and amounted to an “unreasonable search”.

The Court did, however, acknowledge that Dotcom’s appeal would deal with genuine issues. That said, the concern over him disposing of assets outweighed them in this instance.

In respect of the effect of a stay on the studios, the Court looked at potential damages in the studios’ legal action against the Megaupload founder. Dotcom’s expert predicted damages “well below” US$10m, while the studios’ expert predicted in excess of US$100m.

The Court noted that Dotcom has now revealed that his personal assets restrained in both New Zealand and Hong Kong are together worth “not less” than NZ$ 33.93 million (US$ 28.39m). However, all of Dotcom’s assets are subject to a potential claim from his estranged wife, Mona, so the Court judged Dotcom’s share to be around NZ$17m.

As a result the Court accepted that there was an arguable case that eventual damages would be more than the value of assets currently restrained in New Zealand.

As a result, Dotcom is ordered to hand the details of his financial assets, “wherever they are located”, to the lawyers acting for the studios. There are restrictions on access to that information, however.

“The respondents’ solicitors are not to disclose the contents of the affidavit to any person without the leave of the Court,” the decision reads.

As legal proceedings in New Zealand continue, eyes now turn to Hong Kong. In addition to Dotcom’s personal wealth subjected to restraining order as detailed above, an additional NZ$25m owned by Megaupload and Vestor Limited is frozen in Hong Kong. Next week Dotcom’s legal team will attempt to have the restraining order lifted.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.