The founder of file-sharing website Megaupload is being held in jail while a New Zealand court continues to consider his bail.
Kim Dotcom denied charges of internet piracy and money laundering and said authorities were trying to portray the blackest picture of him.
The alleged file sharing site was shut down last week in a global operation run by the FBI.
Prosecutor Anne Toohey argued at a bail hearing that Dotcom, a German national also known as Kim Schmitz, was a flight risk “at the extreme end of the scale” because it was believed he had access to funds, had multiple identities and had a history of fleeing criminal charges.
“The FBI believes the sums located are unlikely to represent all the overseas bank accounts owned by Mr Dotcom,” she said.
But Dotcom’s lawyer said he posed no threat of absconding or restarting his businesses, arguing that his client had cooperated fully, his passports had been seized and his funds frozen, and also that he had a distinctive appearance.
He would obviously prefer to be at large – he doesn’t want to be there any longer than he absolutely has to be
“He is not the sort of person who will pass unnoticed through our customs and immigration lines and controls,” said defence lawyer Paul Davison of the former hacker, reportedly 6ft, 6ins tall and 20 stone.
Judge David McNaughton said the bail application was too complicated for an immediate ruling, adding he would issue a written decision by Wednesday this week.
“Given the breadth of issues covered in this bail application and the seriousness of the issues, I am going to reserve my decision,” the judge said.
US authorities want to extradite Dotcom on charges he masterminded a scheme that made more than $175 million in a few short years by copying and distributing music, movies and other copyrighted content without authorisation. Megaupload’s lawyer has said the company simply offered online storage.
Prosecutor Toohey said two other men sought on global warrants for involvement in Megaupload had been arrested in Europe.
The shockwaves of the case appeared to be spreading among rival websites offering file-sharing. FileSonic, a website providing online data storage, said in a statement on its website that it had halted its file-sharing services.
“All sharing functionality of FileSonic is now disabled. Our service can only be used to upload and retrieve files that you have uploaded personally,” it said.
New Zealand connection
Dotcom, 38, and three others, were arrested in New Zealand last week after police raided his country estate at the request of the US FBI.
Police cut Dotcom out of a safe room he had barricaded himself in, because, according to his lawyer, he was frightened and panicked.
Presenting the case for flight risk, the prosecutor said 45 credit cards in three wallets were found in the mansion under Dotcom’s various names, while three passports were also found. But his defence lawyer said: “My client collects them [credit cards], most of them are out of date.”
Dotcom smiled and waved at around 20 supporters who filled the courtroom and spoke to them after the judge’s decision.
Defence lawyer Davison said Dotcom was “realistic about what is happening”.
“He would obviously prefer to be at large. He doesn’t want to be there any longer than he absolutely has to be,” he said.
Davison said in court that Megaupload’s business was being misrepresented and authorities were being aggressive to add drama to the case.
“His business did not reproduce or copy material as alleged,” he told the court, adding that copyright holders had been given access to Megaupload to identify improper posting of material. He likened the site to YouTube, where people “promoted their creativity”.
In New Zealand, questions are being asked about how Dotcom, who moved to the country in 2010, could be given permanent residency under a business investor scheme despite criminal convictions for insider trading.
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