Kiwis arrested in internet piracy bust

RAIDED: Coatesville's $30m "Dotcom" mansion under construction in 2005.
RAIDED: Coatesville's $30m "Dotcom" mansion under construction in 2005.

Armed police raided a $30m Auckland mansion in a global internet piracy sting which has seen websites including FBI.com shut down in retaliation.

More than 70 police, including the armed offenders squad, searched Coatesville's $30 million "Dotcom" mansion and nine others in Auckland early this morning as part of the FBI-led swoop on the world's largest file-sharing site Megaupload.com.
 
Detective Inspector Grant Wormald from the Organised and Financial Crime Agency NZ (OFCANZ) said they found $6 million worth of top-end motor vehicles, expensive artworks and other luxury items at the home, where they arrested the founder of the site, millionaire Kim Dotcom, 37 - aka Kim Schmitz or Kim Tim Jim Vestor. He is a New Zealand resident.
 
Wormald said it was a complex operation that was planned with the help of four FBI agents who flew to New Zealand this week.
 
"We were aware there were a number of people there. We had a range of issues we had to deal with...in getting from the gate to the door. It wasn't simply a case of going up and knocking on the door."
 
Wormald said there were at least 15 people at the home, including family, children and staff. Two sawn-off shotguns were found at the property.

There were security staff and bodyguards at the home.
 
In total, four people  - Dotcom; Bram van der Kolk, 29, from the Netherlands but also a New Zealand resident;  Finn Batato, 38;  and Mathias Ortmann, 40, both from Germany, were arrested and would appear in the North Shore District Court this afternoon.
 
Three were arrested in Coatesville and one in Orakei.
 
Police said they were still at the mansion searching for good to seize. All the properties were locked down while investigations were completed.

The US Justice Department and the FBI today said Megaupload.com and other related sites allegedly generated more than US$175 million (NZ$217m) in criminal proceeds and caused copyright holders more than US$500m in lost revenue from pirated films and other content.

Over NZ$10m has also been seized from NZ financial institutions, which have been secured by New Zealand's Official Assignee pending the outcome of legal proceedings.

Julius Bencko, 35, from Slovakia, Sven Echternach, 39, from Germany and Andrus Nomm, 32, from Estonia remained at large.

Wormald said today's arrests were the result of several months' coordination with the FBI and US Department of Justice.

"The FBI contacted New Zealand police in early 2011 with a request to assist with their investigation into the Mega conspiracy," Wormald said.

"We were happy to provide this assistance. Staff from OFCANZ and New Zealand police have worked with the US authorities over recent months to effect today's successful operation.

"All the accused have been indicted in the United States. We will continue to work with the US authorities to assist with the extradition proceedings," he said.

The individuals and two corporations - Megaupload Limited and Vestor Limited - were indicted by a grand jury in the Eastern District of Virginia on January 5.

The members of the group, known as the "Mega Conspiracy", each face a maximum penalty of 20 years in prison on the charge of conspiracy to commit racketeering, five years in prison on the charge of conspiracy to commit copyright infringement, 20 years in prison on the charge of conspiracy to commit money laundering and five years in prison on each of the substantive charges of criminal copyright infringement.

Law enforcement agencies worldwide also executed more than 20 search warrants in the United States and seven other countries.

Megaupload.com has said it is diligent in responding to complaints about pirated material.

Dotcom, who was also the sole shareholder of Vestor Limited, wanted to become a New Zealand citizen and was given residency despite two convictions, which he said were wiped clean in his home country of Germany.

He wanted to buy a luxury mansion in north Auckland, but his application was denied by Association Finance Minister Simon Power and Land Information Minister Maurice Williamson last year as he did not meet the "good character" test to buy land.

His arrest comes one day after websites shut down in protest of two congressional proposals intended to thwart the online piracy of copyrighted movies and TV programmes.

ANONYMOUS HITS SITES

Hackers from Anonymoushave taken down websites for the FBI, US Department of Justice, Recording Industry Association of America, the Motion Picture Association of America, and Universal Music Group today.

A tweet from a Twitter account associated with the group has claimed the website for the White House has also been targeted.

Some sites were returning and some remained inaccessible from what was understood to be a DDoS - or Distributed Denial of Service - attack.

Fairfax Media