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: doj, kim dotcom, mega, megabox, threats
Companies: megaupload


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  1. icon
    Chargone (profile), 25 Oct 2012 @ 4:04pm

    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.

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