Crown's bail breach case against Dotcom revealed

After a two-day hearing, German entrepreneur Kim Dotcom remains out on bail. 

Judge Nevin Dawson has indicated arguments will continue on Monday but has allowed media reporting of the bail proceeding.

Today in the Auckland District Court Christine Gordon QC said the Crown wanted Mr Dotcom returned to custody, or alternatively electronically monitored, and to return his bail conditions to those imposed in February 2012. 

The Crown is arguing Mr Dotcom breached his bail when he associated "directly or indirectly" with one of the alleged co-offenders named in that condition. The lawyer said Mr Dotcom indirectly contacted Julius Bencko, who was a developer for Megabox. 

She says the conduct was contrary to assurances by Mr Dotcom he would not work on Mega Upload or any of his associated ventures, such as Megabox.

"It was Megabox, which became Baboom, which your honour heard yesterday."

She also argued it was necessary for the judge to consider a "wider picture" which showed Mr Dotcom had become more of a flight risk than when previously let out on bail.

The court was told the Crown "strongly rejects" the Mr Dotcom's argument the Crown had an "ulterior motive" to revoke bail, and and was using it dig out information about Mr Dotcom's means for civil cases being brought in the US and New Zealand.

"The lack of means was a big plank of the assessment of flight risk."

"It is right for the court to have unease about Mr Dotcom not staying for his extradition hearing given he has no counsel or instructing solicitor," she said. 

But now, Mr Dotcom was able to come up with cash, and she said there was evidence of significant expenditure on legal fees, political parties and the offered $5 million bounty for information that would help with his legal case. 

Furthermore, Mr Dotcom had said yesterday that he had gone from having nothing after bail to amassing $40 million from various companies, she argued. 

"The court cannot be satisfied that part of that [$40 million] has not been hidden away."

Ms Gordon also argued that the attempted sale of a 2010 Rolls Royce Phantom Coupe showed proposed dealings with an asset which Mr Dotcom knew the Crown says is a forfeitable item. Conversations between Mrs Dotcom and another party about the sale inferred that Mr Dotcom was "in on the discussions," the Crown contended.

He had also tried to get $500,000 from a person known only as "SB," although it was unsuccessful.

She reminded the court Mr Dotcom was being accused of conspiracy and said Skype conversations were evidence that Mr Dotcom knew exactly what he was doing in regard to copyright infringement.  

What Dotcom argued
Mr Dotcom's new lawyer, Ron Mansfield, had argued there was no jurisdiction for the order the Crown had made and said it was "disingenuous" for the Crown to amend the application today. 

He pointed out there was no ability to arrest Mr Dotcom as the non-association condition was only in place for a matter of months and was not a current bail condition. She should have asked for a warrant to arrest Mr Dotcom, rathern than "ambushing" him last week. 

Mr Mansfield said that she had also not complied with the bail laws because the court needed to hear evidence on oath from the Crown. 

 "This court no matter what has no jurisdiction to hear an application to revoke the respondent's bail."

He said in any event, there was no clear evidence that there was a breach of current or former conditions.

The lawyer argued the "edited commmunications" provided by the FBI that didn't prove anything and criticised the Crown for not making the full transcripts available to him. He said most of the comments which Ms Gordon relied on in evidence have smiley faces next to them, which indicates they are jokes between people and cannot be taken seriously. 

"On every level, every legal level and every factual level, the applicant's application to revoke bail fails. In my submission it should not have been brought."

The lawyer said that there was no evidence from the cross-examination of Mr Dotcom that backed the assertion that there was no association. 

Mr Mansfield also stressed Baboom had not gone live and Mr Dotcom's involvement with Baboom did not involve association with Mr Bencko. 

He also addressed Crown contentions that Mr Dotcom spent too much time gaming and wasn't focused on his case. 

"Gaming is a bit like another individual playing tennis and to suggest that someone plays tennis while they are on bail on proceedings on which they have spent $10 million on lacks credibility."

Mr Mansfield will continue his argument on Monday. 

vyoung@nbr.co.nz

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