Dotcom extradition upheld

RAW DATA: Justice Gilbert's full judgment (PDF, 363 pages)

READ ALSO: RICK SHERA - Initial observations on the Dotcom decision

Alleged internet pirate Kim Dotcom and his three co-accused are eligible for extradition to the US, the High Court has ruled.

The decision sets the stage for an Appeal Court hearing followed by a possible Supreme Court showdown as the case enters its fifth year.

After five months' deliberation, Justice Murray Gilbert upheld a decision by the District Court that there are grounds for Mr Dotcom, Mathias Ortmann, Bram van der Kolk and Finn Batato to be extradited.

Justice Gilbert departed from the District Court ruling by finding the four defendants' alleged copyright offences did not in themselves activate the US-NZ extradition treaty. However, he found there was a case of fraud to be answered and fraud is an extraditable offence. He made no finding on racketeering and money laundering charges.

His judgment says there is an "abundance of evidence" that cash rewards were paid to Megaupload members who uploaded popular files -- many of which the US government says were copyright infringing. 

These cash payments for allegedly pirated content are a key component of the US Department of Justice case and one of the elements that sets (or set) Megaupload apart from other file-sharing sites.

"There is evidence that traffic to copyright infringing material substantially drove the growth of the Mega business and this was known and encouraged by Messrs Ortmann, van der Kolk, and Dotcom, Justice Gilbert writes in his judgment. 

The evidence of fraud includes allegedly misleading email communication with copyright holders. The government alleges movie studios, record companies and others were informed that infringing material had been removed from Megaupload when it had not been (see Rick Shera's guest post for more on the nuances of the copyright vs fraud question).

"Wilful infringement of copyright can properly be characterised as a dishonest act," Justice Gilbert wrote. "Such infringement deprives the copyright holder of something to which it may be entitled."

"The conduct alleged in count 2 therefore constitutes the offence of conspiracy to defraud in terms of art II.16," he concluded, referring to a particular section of the extradition treaty between New Zealand and the United States that stipulates under what formal criminal allegations extradition "shall be granted."

Justice Gilbert also confirmed that the District Court was correct to dismiss the appellants’ applications for a permanent stay of the extradition proceedings for alleged abuse of process.

The US government has been seeking the extradition for the four men to face trial on 13 counts including allegations of conspiracy to commit racketeering; copyright infringement; money laundering and wire fraud since 2012.

Mr Dotcom and his Megaupload co-accused lost their extradition case in December 2015.

The defendants have an option of taking the case to the Appeal Court, followed by the Supreme Court.

Mr Dotcom's lawyer, Ron Mansfield released a statement describing the decision as "extremely disappointing" and saying Mr Dotcom and his co-accused would fight on.

RAW DATA: Justice Gilbert's full judgment (PDF, 363 pages)

READ ALSO: RICK SHERA - Initial observations on the Dotcom decision