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Federal Judge: Kim Dotcom Forfeited All His Stuff

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By Mark Wilson, Esq. on March 02, 2015 11:38 AM

You remember Kim Dotcom, right? The larger-than-life Internet entrepreneur from New Zealand, via Germany? The guy who changed his last name to "Dotcom" and made a mint operating the website Mega Upload? The U.S. government alleged Mega Upload wasn't the "digital locker" Dotcom claimed it was, but rather a website that encouraged -- and paid for -- the sharing of infringing content.

It was actually both of those, but the case has gone on because the United States wants to try him for violating U.S. law; New Zealand hasn't extradited him yet.

Here's a new idea: He's a "fugitive" because he refuses to extradite himself.

Give Me All the Things

As part of its prosecution of Dotcom, the U.S. government seized all of his assets. Dotcom wanted them back, but the government said that because he refuses to voluntarily come to the United States -- where he would presumably be arrested -- he can't avail himself of the court system there to get his stuff back. Even though he's being prosecuted there.

In November, Dotcom repeated the defense he's maintained all along: He can't be a criminal because there's no such thing as secondary liability for criminal copyright infringement. Last week, however, a federal district judge in Virginia agreed with the government that Dotcom has forfeited the assets in 18 bank accounts in Hong Kong and New Zealand, about 20 cars and motorcycles, two houses, four jet skis, four LCD TVs, a very fancy wristwatch, and several Olaf Mueller photographs.

Judge Liam O'Grady pointed out that even if Dotcom is correct that there's no such thing as secondary criminal copyright infringement, Dotcom "ignores the complaint's allegations that the claimants engaged in a conspiracy to commit copyright infringement." The federal civil forfeiture statute authorizes forfeiture for racketeering, which includes a criminal copyright infringement organization.

The Fugitive

Another wrinkle to this case is that fugitives can be disallowed from using the court system to defend against civil forfeiture actions. So is Dotcom a "fugitive" because he refuses to voluntarily come to the United States to be arrested? Potentially. As O'Grady points out, the purpose of the statute -- 28 USC Section 2466 -- is to prevent a person who leaves the United States to avoid prosecution "to invoke from a safe distance only so much of a United States court's jurisdiction as might secure him the return of alleged criminal proceeds while carefully shielding himself from the possibility of a penal sanction."

This applies not only to a person who leaves the United States, but also (according to O'Grady) a person who's never been here but who refuses to voluntarily enter in order to submit himself to the jurisdiction of the criminal system. However, as O'Grady points out, "[t]he Fourth Circuit has not yet considered fugitive disentitlement pursuant to Section 2466," so we may soon have an appeal on our hands.

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