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Mega Conspiracy? How the Case Against Kim Dotcom Reveals Flaws in American Justice

Mega Conspiracy? How the Case Against Kim Dotcom Reveals Flaws in American Justice
Wed, 9/30/2015 - by Derek Royden

“The judges on this case can become the champions for billions of Internet users or a handful of US content billionaires. #Hope.” — Kim Dotcom via Twitter on Sept. 20

Chelsea Manning, Donald Sterling, Sibel Edmonds, Edward Snowden. These are just a few of the whistleblowers and dissidents who have suffered exile, prison and ruined careers over the last decade. With extradition proceedings moving forward, we might have to add the German-born New Zealand resident Kim Dotcom (formerly Kim Schmitz) to the list. It appears that he may also be the first to face such persecution at the behest of corporations rather than the national security state.

Dotcom’s inclusion on this honorable list might have been hard to imagine prior to the joint New Zealand police/FBI armed operation at his “Dotcom Mansion” in January of 2012. At the time, Dotcom seemed like a caricature of the successful tech entrepreneur, flaunting his wealth at every opportunity. As Carole Cadwalladr described his pre-raid Internet presence in a recent Guardian interview: “I’ve seen him posing next to fast cars, sitting on private jets, cavorting with hot chicks. I’ve seen him holding automatic weapons, gurning in front of helicopters and partying at his house... New Zealand’s most expensive private home, just outside Auckland.” Prior to the police raid, Dotcom's other main claim to fame seemed to be his skill at the video game “Call of Duty.”

Most of Dotcom’s wealth came from Megaupload, which offered a number of services including its namesake file-sharing site, based on peer-to-peer networks and online viewing. In the “Megaupload Song,” released shortly before the raid, Dotcom in the role of a rapper bragged that his site comprised four percent of the Internet’s traffic and received more than 50 million hits a day. Megaupload.com, the crown jewel of his empire, charged “$260 for a lifetime subscription to access files on its servers,” though the majority of its profits were ad based.

The U.S. case brought against Dotcom and his co-defendants, including three senior officers in the company, alleges that Megaupload was different from other online storage services because the site relied more on advertising than subscriptions for revenue. The indictment claims that the company actively encouraged users to pirate content, especially through its program of paying users for uploading popular files. Another big part of the American government’s case hinges on the fact that Megaupload didn’t monitor individual users to ensure that that those found to be uploading copyrighted material would be banned.

In an excellent piece on the website Techdirt, Mike Masnick, who has been following the twists and turns of Dotcom's "Mega Conspiracy" case since the beginning, looked at some of its more problematic aspects, which include charges of racketeering and money laundering. Among his interesting discoveries: the U.S. government’s case relies in part on the fact that the main Megaupload site didn’t have a search engine.

This is surprising, says Masnick, because in most previous cases involving peer to peer networks, government used the search engine functions – for networks like Grokster, for example – to prove their intent to allow piracy. As Masnick wrote: “To use the lack of a feature, that previously was shown to be a problem, as evidence of a conspiracy is crazy.”

Among the most serious charges facing Dotcom is money laundering. To understand the accusations in context, take a look at the case of mega-bank HSBC – a much bigger fish than Megaupload – which faced money laundering charges in 2012. Whereas any money laundered by Dotcom and his cohorts was almost certainly for private enrichment, HSBC’s actions empowered some of the world's most violent criminal organizations, including Mexico’s Sinaloa and Colombia’s Norte del Valle Cartels, as well as groups on the United States’ terrorism watch list.

In the end, HSBC signed a five-year deferred prosecution agreement, absolving the bank and its officers of any criminal liability and agreeing to pay almost $2 billion in fines – which seems like a large number until you realize the bank made more than $21 billion in profits in 2011 alone. More outrageously, as penance HSBC promised that certain anti-money laundering and compliance officers at the bank would have their bonuses “clawed back” and that senior officials would “partially defer their bonuses” for the life of the five year agreement. Compare the loss of some compensation for HSBC executives to the decades that Dotcom could face in prison, and it appears once more that different rules are being applied to different people – the latest sign that all is not right in American justice.

To reinforce that claim, the U.S. Justice Department brought a separate civil asset forfeiture case against Dotcom, which it won to the tune of $67 million. Civil asset forfeiture is already controversial; many commentators have noted that it's often used as a piggy bank for law enforcement. Its expansion to target foreigners should be just as controversial, if not more so. For the moment, the High Court of New Zealand has denied the right of the American government to take possession of Dotcom's assets.

What may be scariest about the Dotcom case is the fact that vast resources of the U.S. government are being deployed at the bidding of the Motion Picture Association of America, Recording Industry Association of America, and other massive corporations whose profits are threatened by Internet pioneers like Dotcom. If Dotcom and his co-defendants are to be charged criminally for allowing the sharing of copyrighted material, why not charge the CEOs of Dropbox or Google?

Unfortunately, those who defend the public's freedoms are often, and increasingly, those who are persecuted by our governments. Kim Dotcom has become an unlikely hero for Internet freedom; since his arrest, whether out of opportunism or due to legitimate political passions, he has evolved into a vocal activist going so far as to form his own political party. How his story play out from here – in the public and in the courts – only time will tell.

 

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Comments

The videos of the Court Extradition videos were deleted by the original Youtube channel, named 'Stream TV'. But I found a user that downloaded the majority of the videos before they were deleted.
They are hosted here under username chughes374 , and here is the link to the playlist. youtube /playlist?list=PL-V4gyYFdq1znADGeGHC1FCCKSWgEZ7T4
If that link every goes down, message me. As I would be actively looking for another source.

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