More than $750,000 of cash, investments and flash cars have been handed back to Kim Dotcom and his associates as wrangling over the US case against them continues.
In the latest decision by the New Zealand High Court an order by the US District Court for the Eastern District of Virginia to seize all the internet tycoon's assets has been upheld - with the exception of various amounts of money and cars that must be given back.
The decision by Justice Judith Potter, follows a hearing into the controversial foreign restraining order placed by New Zealand police on Dotcom during the January raid on his Auckland mansion.
It means his possessions could be held for up to two years while he faces a further legal battle against extradition to the US to face allegations of copyright breaches through his internet site Megaupload.
Dotcom's lawyer Willie Akel had argued a bureaucratic bungle by New Zealand authorities meant the order made under the Mutual Assistance in Criminal Matters Act was invalid.
He also said the New Zealand courts should insist the restraint order had been investigated by New Zealand authorities to ensure it was ''right and proper'' and not simply allow a US request to be ''rubber stamped.''
But Justice Potter said ''it cannot be seriously argued that the Attorney General is required to consider the record of the evidence that was placed before the [US] Grand Jury and how this evidence was selected.''
However, she left the door open for yet more legal action by Dotcom.
Her ruling follows a blunder which police have already admitted when they initially seized the Dotcom assets under the wrong type of ''order.'' Police later filled out the right paperwork, but for 11 days the assets were held under an order which was ''null and void.''
Justice Potter said Dotcom and associates ''may have remedies at public law'' for those 11 days.
In the meantime, she has confirmed Dotcom himself will continue to get a $20,000 monthly living allowance that comes from the interest paid on a $10 million investment Dotcom has in NZ government bonds.
He will also be able to use a 2011 Mercedes-Benz G55AMG, valued at $250,000, with the licence plate Police.
A bank account with another $301,000 will also be returned to him.
His wife Mona, gets living expenses, medical bills paid and a 2010 Toyota Vellfire people mover valued at $60,000 - with the personalised plate WOW.
However, another $6 million of luxury cars including eight more Mercedes-Benz and a Rolls Royce with varying personalised plates from GOOD to EVIL, GOD, STONED, HACKER and MAFIA, remain locked up by the authorities.
Bram Van Der Kolk gets $10,000 for living expenses and a 2005 Mercedes Benz A170, while the company Megastuff was released $74,000 to pay creditors.
Dotcom is also enjoying relaxed bail conditions which allow him access to the internet and permission to go for a 90 minute swim each day in the pool of the $40 million mansion he rents.
Dotcom has confirmed he will use the new found freedoms to record a dance album - any profits would help pay his legal fees, he said.
Dotcom, 38, the founder of file-sharing company Megaupload, and his three co-accused, Finn Batato, Mathias Ortmann and van der Kolk, all German born, are now awaiting extradition hearings.
Lawyers acting for the US have said they will argue Dotcom should be extradited because he was a member of an organised criminal group, which carries a sentence of five years.
However, in another paperwork mishap, United States district court judge Liam O'Grady, is reported to have said he didn't know if ''we are ever going to have a trial in this matter'' after being told Dotcom's file-sharing company had never been formally served with criminal papers by the US.
- © Fairfax NZ News
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