DOJ Hints At Additional Charges Against Kim Dotcom If He Launches Megabox

from the you-wouldn't-want-to-do-that,-now... dept

There have been a bunch of stories over the past month or so about how Kim Dotcom is supposedly getting ready to launch a new service called Megabox. We’ve purposely avoided such stories, mainly because they’re pure hype and speculation for vaporware. If he actually launches something then perhaps there’s a story there. Also, we’re somewhat amazed (or possibly just amused) at Megaupload supporters who seem to already think that Megabox is an amazing idea, since the details reported about it certainly appear to be little different from garden variety malware, injecting ads into other sites. Either way, in a recent profile of Dotcom in Wired, he talks a little more about the new plans, suggesting that it was something to keep them busy while fighting the lawsuit.

That said, it appears that the Justice Department has seen the PR reports about the new vaporware and are effectively pre-warning Dotcom not to go forward with the plan.

A new filing from the DOJ in the US side of the lawsuit (embedded below), is really a response to Megaupload’s recent request to have the charges against the company temporarily dismissed until such time as the individual defendants are extradited. As we’ve explained, this is mostly a procedural fight, over whether or not the company itself can be charged, despite not having a US presence. None of that directly impacts the individuals who have been charged, but certainly could impact the company’s ability to launch a new business.

The DOJ filing mostly argues that there is no legal or practical reason to allow the case to be dismissed, even temporarily, as the individuals are still charged, and re-charging the company at a later date will just waste resources. It also argues that Dotcom’s US-based lawyers are the real problem here, as they had offered to accept service of the lawsuit in exchange for some sort of deal early on (which the DOJ refused).

What’s interesting about the filing is that, without directly addressing the new effort to launch Megabox or whatever Dotcom is calling the new thing, they appear to be warning him that doing so may lead to additional charges against him. The argument as it relates to the procedural question is that, in his push to be allowed to post bail in New Zealand, Dotcom clearly indicated that he would not and could not restart Megaupload or a similar business, because the government had so completely shut him down. As that relates to the procedural question, the DOJ is arguing that there can be no “harm” to the company Megaupload because Dotcom has already said he won’t relaunch the company. So if he won’t relaunch, what does it matter if the company is charged now or later?

But then the DOJ goes a little further. After it uses all those quotes of him promising not to relaunch anything while out on bail, the DOJ tosses the following into a footnote:

Defense Counsel’s claim that the corporate defendant can and should be allowed to operate undermines the sworn statements of Dotcom that he has no plans or ability to continue to operate or fund the businesses in the Indictment during pendency of the extradition process. If defendant Dotcom intentionally misled the court in New Zealand about his intentions and capabilities in order to obtain his release from pre-extradition confinement, it seems Defense Counsel’s representation might endanger Dotcom’s bail situation or even subject him to additional charges.

In other words, beyond this procedural question, the DOJ is hinting that if Dotcom launches something new, they may say he violated the conditions for getting bail.

The DOJ also uses this as an opportunity to (once again) try to block Megaupload from using its law firm, claiming that because the lawyers are arguing for the case against Megaupload to be dismissed, and this might lead Dotcom to launch something new, that there’s a conflict of interest:

The issue raised by the claim of Defense Counsel is particularly awkward since defendant Dotcom is also their client. As the government has pointed out repeatedly, there are a number of conflicts in Defense Counsel’s representations of the various defendants in this matter, of which this is only the most recent example, that have yet to be reviewed by the Court

None of that actually makes much sense. Whether or not they have a legitimate claim for getting the case against Megaupload dismissed, that is a separate issue from whether or not Dotcom launches something new. While I’m guessing the procedural fight is a dead end, the fact that the DOJ is even using that to toss additional threats at Dotcom should he launch his new project shows that they’ll leave no stone unturned in trying to hit back at Dotcom.

Filed Under: , , , ,
Companies: megaupload

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “DOJ Hints At Additional Charges Against Kim Dotcom If He Launches Megabox”

Subscribe: RSS Leave a comment
61 Comments
Rikuo (profile) says:

I read this on Torrentfreak. I love this quote from there

“Among other things, the DoJ argues that Megaupload has not ?suffered massive harm? as New Zealand?s court records show that Dotcom doesn?t intent to bring the site back online.”

Megaupload has NOT suffered massive harm…

Guys, (especially trolls) get that through your heads. The US Department of Justice has destroyed the company Megaupload…and they have not suffered massive harm, all because DotCom doesn’t want to bring back the site.

average_joe (profile) says:

Re: Re:

average_bob and out_of_the_mind comments in 3, 2…

LMAO! On the surface, I think the DOJ is correct: Dotcom launching a new iteration of the service that he’s already being prosecuted for is stupidity at its finest. What kind of an idiot does that? I look forward to reading the DOJ’s latest brief, and I’m thankful to Mike for posting it.

Anonymous Coward says:

Re: Re: Re:

I guess there is nothing against the law for someone or some people to set up the Mega business for him and run it in there name until such a time that he could take over. As long as he is not mentioned on the setup doctuments or mentioned as a list member for the Mega company and it is run by someone else then he should be well clear of breaking any laws. When the Megaupload case comes to an end then he can take over the running of the new Mega company.

average_joe (profile) says:

Re: Re: Re: Re:

Actually AJ megabox is nothing like megaupload bar sharing the first part of its name.

I’m not referring to Megabox. I’m talking about the “New Megaupload” called “Mega”: http://torrentfreak.com/new-megaupload-will-deflect-copyright-liability-and-become-raid-proof-121018/

Nice attempted deflection.

Anonymous Coward says:

Re: Re: Re:2 Re:

Rapidshare…dropbox etc. The business model is not illegal, never has been, and there is nothing in the bail conditions preventing him from establishing a new business. Mind you, he maintains Megaupload was legal too, and until proven in court this is as valid a claim as that of the DoJ that it wasn’t. However, he is explicitly forbidden from *re-launching* MU. Not from launching another cyberlocker. Just because you cannot get your head round the fact that cyber-lockers are legal, doesn’t make it so (do you work for the DoJ? they seem to have a similar problem with logic..)

Anonymous Coward says:

Re: Re: Re:3 Re:

Who cares if it violates his bail conditions? If he launches “Mega,” that’ll be just more charges against him when he does face trial in the U.S. And the jury is going to LOVE the fact that he relaunched a similar operation. That will practically guarantee him the maximum sentence. So sure, he should definitely get right on launching “Mega.” What a great idea.

Anonymous Coward says:

Re: Re: Re:4 Re:

As long as Dotcom does not have his name listed as a member of the company when it launches then he hasn’t breeched his bail conditions. If the company is run by someone else then he isn’t running the business. He could give instructions (friendly advice) to the person running the business but then when the Megaupload case is ended then get the Mega company transfered into his name. I would love to the see the look on the DOJ face when they find out that Dotcom is not listed as a member of the company and therefore there is no case for them to prove that he is running the new Mega business.

Michael (profile) says:

So is Kim Dotcom a modern era mob boss?

So is Kim Dotcom a modern era mob boss?

The way that anything and everything is being used against him, even in the most tenuously grasping possibilities, makes me feel that this is more of a witch hunt than it is actually attempting to service the interests of the public.

From what I recall reading on techdirt earlier -some- dislike for the things he’s done before is probably deserved, but thanks to this circus all I can see now is yet another persecuted martyr being attacked via proxy for evil forces of regressive causes (‘big media’).

out_of_the_blue says:

Shorter version for dolts:

“Defense Counsel?s claim that the corporate defendant can and should be allowed to operate undermines the sworn statements of Dotcom that he has no plans or ability to continue to operate or fund the businesses in the Indictment during pendency of the extradition process. If defendant Dotcom intentionally misled the court in New Zealand about his intentions and capabilities in order to obtain his release from pre-extradition confinement, it seems Defense Counsel?s representation might endanger Dotcom?s bail situation or even subject him to additional charges.”

If he lied to get bailed that the biz is going to be dormant, then he may get into a heap more trouble.

What in the world is controversial about that, Mike? That’s a statement of what a court might do in nearly ANY criminal case in those circumstances, not a threat to trump up charges.– It’s just that you have a huge bias so think you’ve found a shocking point. Geez.

Anonymous Coward says:

Re: Shorter version for dolts:

“If he lied to get bailed that the biz is going to be dormant, then he may get into a heap more trouble.

What in the world is controversial about that, Mike? That’s a statement of what a court might do in nearly ANY criminal case in those circumstances, not a threat to trump up charges.– It’s just that you have a huge bias so think you’ve found a shocking point. Geez.”

I guess the part you didn’t pay attention to that you quoted flew over your head. So let me repeat it: “Defense Counsel?s claim that the corporate defendant can and should be allowed to operate undermines the sworn statements of Dotcom that he has no plans or ability to continue to operate or fund the businesses in the Indictment during pendency of the extradition process.”

He’s not going to relaunch Megaupload, the business at the center of the indictment. He’s launching something entirely new and separate from Megaupload. The fact that it has “Mega” in it’s name DOES NOT make it the same business. As such, assuming he does launch it, it is not the same business and therefore he has in no way lied to the court.

I guess in your haste to take a shot at Mike, due to YOUR huge bias, you may have overlooked that simple fact, which effectively is the same as telling the DOJ to get f*cked. Then again, much like you, in their haste to paint Dotcom in a bad light and not in a not so subtle manner threaten him, they may have also not realized that a business sharing a similar name to one in an indictment DOES NOT the same business make it. Much like you they can read but they can’t comprehend.

Which just adds more hilarity to things and makes for delightful entertainment.

G Thompson (profile) says:

Re: Shorter version for dolts:

Ok. Bail 101 for the dummies! (I’m looking at you ootb)

If as a condition of Bail there was a “shall operate no other business” then YES he might be in breach of bail. Though this condition is highly unlikely and extremely egregious and would be worded in such a way that could only be applied to MegaUpload and NOT other business’s that ‘might’ be initiated.

* Sworn statements that are read in court in Bail proceedings are irrelevant no matter what the DoJ think. The ONLY way to be in breach of bail is via breaching the conditions of said bail, and unless part of the conditionals. ie: No breach. The only thing that could be slightly injurious is a sworn statement (under oath) if shown to be false ‘at the time’ could result in contempt – but HIGHLY unlikely in this case

* Breach of Bail is NOT an Offence and NOT chargeable.

*If a breach of bail is alleged, all it means is that the bailee is brought back before the court for the court to decide whether bail is shall still be granted, other conditions imposes, or refused bail and therefore sent back to gaol. The court decides NO ONE ELSE!

* The DOJ have absolutely NO standing in bail matters, the only people who have standing are the Prosecutors or the court itself of New Zealand.

— end of lesson

without directly addressing the new effort to launch Megabox or whatever Dotcom is calling the new thing, they appear to be warning him that doing so may lead to additional charges against him.

For the DOJ to state he might of breached bail in another forum (ie: US court) then doctrine of laches might prevail against the DOJ and things like duress and tortuous interference can and should be actionable against them.

If they are speaking about additional charges that could, might, OMG we need to figure out how to get him more, be brought then this is without a doubt Duress and major interference by a sovereign power.

IMHO the DoJ are running scared and are being used more against trying to prove a conflict of ‘not in best interest of client’ by defendants counsel so that they can have them replaced (the DoJ’s aim from the beginning) than anything else.. though this might bite them HARD in NZ now. Interference is not tolerated by courts.

out_of_the_blue says:

By the way, according to WSJ, was in the US:

Don’t know why you guys keep saying that Megaupload wasn’t in the US. Emphasis added:

“The indictment claims Megaupload took in more than $110 million over five years in membership fees and other payments via a PayPal account. It also leased capacity on more than 1,000 servers in North America and another 630 in the Netherlands.”

http://online.wsj.com/article_email/SB10001424052970204616504577171060611948408-lMyQjAxMTAyMDEwOTExNDkyWj.html

But I ain’t followed it close, so you might correct me on the point. — I mean on where the servers were, not just repeating that it didn’t have a US address. It clearly was doing biz in the US, money transfers, advertising…

Chargone (profile) says:

Re: By the way, according to WSJ, was in the US:

the Hosting company is a US entity.
Mega Upload is Not.

in the same way that a Sugar plantation (as a random example) that exports to the US is, none the less, NOT a US business (unless owned by a US corporation and blah blah blah) and doesn’t need to have an address or presence in the US (even if their produce does sit in a warehouse in the US prior to sale.)

the paypal thing is like trying to claim that every business in the world that accepts Visa or American Express or whatever is a US business.

upshot of all this? it’s Not Bound By US Law (though the other entities it’s dealing with may be)… in spite of which, mind, it was following said law Anyway, and BY said law was not a legitimate target for the things it is accused of, even if it HAD been a US business.

Megaupload, the corporation/business/Whatever has no presence in the USA. it owns nothing there, has no address there, pays no taxes there, and so on, and so forth.

I’m not a lawyer, but it’s not that damn hard to understand.

to flip it around: if a US company rented server space in Europe (like, say, i dunno, MANY MMORPGS?), we’ll go with the Neitherlands for lack of a better pick off the top of my head, but had No offices there, all it’s physical products were Exported to the Netherlands from the US, etc, etc… and some random Russian mafia types (for example) were using it’s chat function or e-mail or Whatever on that server to organize criminal activity, amongst the Thousands of users doing whatever legitimate function the thing was designed for, would YOU be ok with the Dutch government compleatly destroying said US company’s ability to function Before any court case was even begun? would said US company fall under Dutch law? note it has No Presence in the Neitherlands (it’s renting hosting space from a company that IS, that’s it.) and the people (supposedly, as they haven’t even been identified, let alone charged) breaking the law have NOTHING to do with the company. oh, right, and most of the things the US company is being charged with are either activity that Dutch law says is legal OR such nonsense as ‘paying rent on that hardware you’re using is money laundering’ ‘making money on your business’s primary function is evidence that you are wilfully encouraging illegal activity for profit’ and so on.

does that sound legit to you At All?

again, not a lawyer, but this is the sort of bullshit we’re dealing with here.

Zos (profile) says:

Re: By the way, according to WSJ, was in the US:

they leased capacity on american servers, on the advice of their legal team, SPECIFICALLY so that DMCA safe harbors would apply.

because they were operating inside the law. Until the DOJ decided to treat them like a cartel boss, and ignore anything resembling due process, actual law, or anything but the industrys “we’re telling you man, he’s the devil”

Cosmicrat says:

Its ironic

That such an obnoxious buffoon of an impresario as Dotcom actually demonstrates more integrity than scores of less controversial hosting companies (I mean the ones who are rolling over and deleting user pages at the barest allegation of infringement). Dotcom is standing up to the bullies, sure enough that he will prevail that he’s launching a similar service even while under duress from no less than the DOJ.

We need more like him (only less obnoxious).

Anonymous Coward says:

Re: Re:

I guess there is nothing against the law for someone or some people to set up the Mega business for him and run it in there name until such a time that he could take over. As long as he is not mentioned on the setup doctuments or mentioned as a list member for the Mega company and it is run by someone else then he should be well clear of breaking any laws. When the Megaupload case comes to an end then he can take over the running of the new Mega company.

NakkiNyan (profile) says:

It still kills me that Kim is called a pirate when he gave media the keys to kill downloads themselves and complied with DMCA take-down notices yet Dropbox, RapidShare, MediaFire, ZippyShare, RapidGator, uploading, DataFileHost, Orion, SlingFile, LimeLinx, Upload.to and others don’t do all of the same… hell some just blocked US IP addresses so media companies couldn’t find the files.

DOJ is just dragging this out to make a spectacle of the whole mess so they can say they are working hard. They didn’t even find the % of pirated material they expected to.

Gregg says:

3000+ years ago China built a big wall to keep out the Barbarians… I think the rest of the world should think to do the same, but build a great fire wall to keep the US out of the rest of the world. I’m sure we can convince most Americans that the wall if for their protection from illegal alien Blogging or fighting oversee’s jobs for tech support….

Anonymous Coward says:

so how is starting a new company with all new equipment the same as re-starting an old company that has been totally destroyed and the equipment used by it is unreachable? seems to me that the DoJ have spun so much bull shit, told so many lies, they have no clue now what lies they are saying, what the last lie was they said, when to stop lying and how to determine reality from what they are saying. talk about being desperate and boy, how it shows!! there must be a lot of arse holes twitching both in Hollywood and in the government!

Add Your Comment

Your email address will not be published.

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...
Loading...