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Kim Dotcom
Kim Dotcom

Kim Dotcom in 1996
Born Kim Schmitz
January 21, 1974 (1974-01-21) (age 38)
Kiel, Germany
Residence New Zealand, Hong Kong
Nationality German
Other names Kimble, Kim Tim Jim Vestor, Mr Dotcom
Citizenship German, Finnish
Education High school
Occupation CIO
CEO (2005–11)
Years active 2005–12
Organization Megaupload Ltd.
Known for Founder of Megaupload.com and sister websites
Home town Kiel, Germany
Height 6 feet 6 inches (1.98 m)
Weight 285 pounds (129 kg)[1]
Criminal charge Computer fraud; insider trading; embezzlement; possession of stolen goods; abuse of titles
Criminal penalty Multiple suspended detentions
Criminal status Convicted, probation served
Spouse Mona
Children 3[2]

Kim Dotcom, born Kim Schmitz[3] January 21, 1974[4] also known as Kimble[5] and Kim Tim Jim Vestor,[6] is a German-Finnish[7] computer programmer and businessman who rose to prominence during the dot-com bubble and was convicted of insider trading and embezzlement in its aftermath.[8] He is also known as the founder of Megaupload and its associated websites.[9][8][10] He legally changed his surname to Dotcom circa 2005.[11] On January 20, 2012, the New Zealand Police placed him in custody under the charges of criminal copyright infringement in relation to his Megaupload website. On January 1, 2012, he became the top Modern Warfare 3 player, but lost his position while in custody.[12]

Contents

Early career

As a teenager, Dotcom earned a reputation in his native Germany for cracking corporate PBX systems in the United States, and tried to parlay it into a career in data security.[13] That effort led to his arrest on charges of using and selling stolen calling card numbers.[14][15] In 1994, Dotcom founded a computer security company called DataProtect.[16] In 1999, DataProtect and IVM engineering presented the "Megacar", a Brabus-tuned Mercedes-Benz S-Class W220 which, among other features, had a Windows NT server, a 17.3" SGI flat panel display and combined 16 GSM modules to provide mobile broadband Internet access.[17]

In 1998, Dotcom was sentenced to a probationary sentence of two years for computer fraud and handling stolen goods.[18] According to a report by News & Record, he had traded stolen calling card numbers he bought from hackers in the United States.[19] He achieved early notoriety by being the subject of an advanced-for-its-time flash animation video called Kimble Special Agent.[20] The name is a reference to Richard Kimble, the main character of the television series The Fugitive.[21]

Dotcom later sold 80% of the shares of DataProtect to TÜV Rheinland in 2000, during the dot-com bubble. The former went bankrupt at the time of the subsequent market crash in 2001.[22][23]

He is known for his large frame, as he is 2 metres (6.6 ft) tall and weighs 130 kilograms (290 lb).[24]

Insider trading and embezzlement

In 2001, Dotcom purchased $375,000 worth of shares of the nearly bankrupt company LetsBuyIt.com and subsequently announced his intention to invest €50 million in the company.[25] Unknown to others, Dotcom did not have the funds available to invest, although the announcement caused the share value of LetsBuyIt.com to jump by nearly 300%.[26] Dotcom quickly sold the shares and profited $1.5 million as a result.[25]

Dotcom had also arranged and obtained an unsecured loan of €280,000 from Monkey AG, a company for which Dotcom had served as Chairman of the Board. The funds were to be paid to Kimvestor AG. As a result, both Monkey and Kimvestor went bankrupt. Dotcom expressed remorse, stating that he had been "dazzled" and had not recognized that he would be unable to repay the loans.[27]

In January 2002, Dotcom was arrested in Bangkok, Thailand, deported to Germany, and sentenced to a probationary sentence of one year and eight months, and a €100,000 fine, the largest insider-trading case in Germany at the time.[28] Dotcom also pleaded guilty to embezzlement in November 2003 and received a two-year probation sentence.[29]

Megaupload and related companies

Megaupload.com

Megaupload Limited businesses

On 21 March 2005, Dotcom founded Megaupload Limited, a Hong Kong-based file hosting and sharing business that eventually became the 13th most popular site on the internet[30] with over 150 employees, US $175 million revenues,[31] 50 million visitors daily,[30] and estimated to be responsible at its peak for 4% of all internet traffic.[30][32]

The Megaupload business' domain names were seized and the sites shut down by the U.S. Justice Department on 19 January 2012, following their indictment and arrests of the owners for allegedly operating as an organization dedicated to copyright infringement.[33]

Civil litigation and controversies

He was sued for copyright infringement as owner of Megaupload.[34] A settlement was later filed.[35]

In December 2011, Dotcom's Megaworld (owner of Megaupload, Megavideo, Megalive and more) released its "Megaupload Song" promotional music video, which featured Kanye West, will.i.am, Jamie Foxx, Sean "Diddy" Combs, Alicia Keys, Chris Brown and more lauding the service. Universal Music Group (UMG) responded by using the DMCA takedown process to have the clip removed from YouTube and other sites. Dotcom accused UMG of sending "illegitimate takedown notices", since UMG did not own the song in question, and Megaupload went on to file a lawsuit against UMG.[10][36][37] A statement released by UMG claimed that a special arrangement exists between UMG and YouTube which allows UMG to take down any videos featuring their artists, regardless of copyright status.[38] This claim was later explicitly denied by YouTube,[39] which has since reinstated the video.[40]

2012 arrest in New Zealand and seizure of Megaupload's websites

On January 5, 2012,[41] indictments were filed in the US against Dotcom on criminal copyright infringement charges along with Július Benčko and 5 other associates. On January 20, 2012, Kim Dotcom, Finn Batato, Mathias Ortmann and Bram van der Kolk were arrested in Coatesville, Auckland, New Zealand, by New Zealand Police, following an armed raid on his house. Authorities were cooperating with the United States' FBI and Justice Department, Hong Kong Customs and the Hong Kong Department of Justice, the Netherlands Police Agency and the Public Prosecutor's Office for Serious Fraud and Environmental Crime in Rotterdam, London's Metropolitan Police Service, Germany’s Bundeskriminalamt and the German Public Prosecutors, the Royal Canadian Mounted Police and the Canadian Department of Justice in the investigation preceding the arrests.[42][43]

According to Dotcom's defence, the police operation against Megaupload was unnecessarily grandiose: "... armed officers arrived in helicopters and dropped into the Dotcom mansion courtyard."[44]

On January 25th, 2012 (NZ local time) Dotcom was refused bail due to alleged risks of fleeing to Germany.[45][46]

On February 6, Dotcom invited New Zealand journalist John Campbell of Campbell Live to visit his Coatesville property and inspect the damage done by police. According to head of security, Wayne Tempero "the force was incredible.... Had they simply asked us we would have opened the door to any room they wanted to enter." He said Mr Dotcom seemed shocked by the police action. “I remember him saying “copyright infringement” and shook his head, like he’s going “what the hell?”. We weren’t building bombs in the cellar, we didn’t have a meth lab bigger than the South Island here. This was a normal family house.”[47]

Other activities

Dotcom has taken part in the Gumball 3000 international road rally on several occasions, finishing "first" in 2001 in his Mercedes Brabus SV12 Megacar. He also competed in 2004.[48]

Since 2001, Dotcom has received media coverage as a founder of a Hong Kong based investing company called Trendax. The company claimed to use artificial intelligence to maximize investment return and Dotcom tried to find investors for a hedge fund managed by the company.[49] According to media reports Dotcom never had a proper license to start the fund.[50]

In 2010, Dotcom leased a NZ$30M mansion at Coatesville, near Auckland, owned by Richard and Ruth Bradley, the British founders of Chrisco, and considered the most expensive house in the country. He had an arrangement to buy the mansion when the lease expired,[51] but the New Zealand Government declined his application to buy the land on the basis that he did not meet the "good character" test.[52] Dotcom was granted permanent residency in New Zealand in 2010.[53][9]

An investigative piece found Dotcom in Hong Kong business records with the new name "Kim Tim Jim Vestor", allegedly bearing a Finnish passport, and acting as director of several "Mega-" companies, among them Megaupload Ltd. and Megarotic Ltd.[8] According to Megaupload spokesperson B. Lam, Kim is one of many shareholders at Mega and not involved in most day-to-day business decisions.[8]

Kim Dotcom has spoken out against his negative portrayal in the media, claiming to be a reformed character and a legitimate businessman who has been unfairly demonized by US authorities and industry trade groups such as the RIAA and MPAA. He contends that the services offered by his Megaupload site were not significantly different from those of comparable services such as Rapidshare or YouTube, and he has just been used as a scapegoat because of his hacker past. Dotcom is also keen to point out his charitable works, including funding the fireworks display for New Year 2011 in Auckland,[54] and donating large amounts of money to the relief fund following the devastating 2011 Christchurch earthquakes, and explains that his property purchases in New Zealand were approved by several other government Ministers before being vetoed at the last minute by Justice Minister Simon Power, after the US Department of Justice secretly asked his department for help with their investigation of Dotcom.[55][56]

References

  1. ^ Arrested Megaupload founder said he was a 'criminal neighbor' turned 'good boy' in emails MSNBC, January 25, 2012
  2. ^ Dotcom birthday party targeted The New Zealand Herald, January 22, 2012
  3. ^ "The lavish life of file-sharing kingpin Kim Dotcom". news.com.au. 22 January 2012. http://www.news.com.au/technology/the-avish-life-of-file-sharing-kingpin-kim-dotcom/story-e6frfrnr-1226250461590. Retrieved 23 January 2012. 
  4. ^ "Der Unfassbare", Berliner Morgenpost, February 12, 2001 (German)
  5. ^ Kimble bleibt stumm (German) January 23, 2001
  6. ^ Dearnaley, Mathew (December 31, 2010). "Dark horse to light up New Year". The New Zealand Herald. http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10697221. Retrieved June 12, 2011. 
  7. ^ "Megauploadin Kim Dotcom on puoliksi suomalainen ja hänellä on sukua Turussa" (Finnish) Helsingin Sanomat, January 20, 2012)
  8. ^ a b c d Wishart, Ian (April 2010). "Merry Chrischmitz or Merry Hell?". Investigate. http://www.florianpoullin.fr/sites/florianpoullin.fr/files/investigate.pdf. Retrieved December 31, 2011. 
  9. ^ a b Sandoval, Greg (August 4, 2011). "The mystery man behind Megaupload piracy fight". CNET News. http://news.cnet.com/8301-31001_3-20087753-261/the-mystery-man-behind-megaupload-piracy-fight/. Retrieved January 19, 2012. 
  10. ^ a b Megaupload threatens to sue Universal over YouTube video Guardian
  11. ^ Gallagher, Sean. "The Fast, Fabulous, Allegedly Fraudulent Life of Megaupload’s Kim Dotcom". Wired. http://www.wired.com/threatlevel/2012/01/kim-dotcom/. Retrieved 26 January 2012. 
  12. ^ "Megaupload chief slumps from his position as world's No. 1 Modern Warfare 3 player after his New Zealand piracy arrest". Dailymail.co.uk. http://www.dailymail.co.uk/sciencetech/article-2090996/Megaupload-CEO-Kim-Dotcom-slumps-No-2-Modern-Warfare-3-player-New-Zealand-arrest.html. 
  13. ^ William Flanagan and Brigid McMenamin “The Playground Bullies are Learning How to Type” Forbes magazine, pp. 182-189, December 21, 1992
  14. ^ Brigid McMenamin, “Fallen hacker,” Forbes magazine, p. 12, June 20, 1994
  15. ^ McMenamin, Brigid (June 20, 1994). ""Fallen hacker"". Forbes. http://business.highbeam.com/392705/article-1G1-16000250/fallen-hacker. 
  16. ^ Pressetext: Start-up der Woche - Megacar (German)
  17. ^ "Tomshardware.co.uk". Tomshardware.co.uk. 1999-03-15. http://www.tomshardware.co.uk/upcoming-cebit-highlight,review-2415-2.html. Retrieved 2012-01-27. 
  18. ^ Zugriff in Bangkok (German), Manager Magazin, January 18, 2002
  19. ^ "$50 Million Fraud Charges", News & Record, November 1, 1994
  20. ^ Shanklin, Will (Jan. 20, 2012). "A closer look at Kim Dotcom, the larger-than-life founder of Megaupload". Geek.com. http://www.geek.com/articles/geek-pick/a-closer-look-at-kim-dotcom-the-larger-than-life-founder-of-megaupload-20120120/. Retrieved January 20, 2012. 
  21. ^ Kwek, Glenda (23 January 2012). "Inside the lavish life of Kim Dotcom". The Canberra Times. http://www.canberratimes.com.au/news/world/world/general/inside-the-lavish-life-of-kim-dotcom/2429207.aspx?storypage=0. Retrieved 28 January 2012. 
  22. ^ Kimvestor bringt den TÜV in Erklärungsnot (German), Handelsblatt, February 6, 2001
  23. ^ TÜV Data Protect beantragt Insolvenz (German). ZDNet. September 25, 2001
  24. ^ Perry, Michael (23 January 2012). "Megaupload boss says innocent, rival stops file-sharing". Reuters. http://www.reuters.com/article/2012/01/23/us-internet-piracy-megaupload-idUSTRE80K07Q20120123. Retrieved 25 January 2012. 
  25. ^ a b Haftstrafe für Schmitz? (German), Der Spiegel 5/2002, January 28, 2002
  26. ^ "Rekordanstieg bei Letsbuyit" (German) Manager-Magazin, January 25, 2001
  27. ^ "Alle haben mit Geld um sich geworfen" (German) Manager-Magazin, November 11, 2003 - "Ich war dadurch geblendet", sagte sich Schmitz ("I was dazzled by it")
  28. ^ Luring German Investors Back Into The Pool, Business Week, April 12, 2004.
  29. ^ Schnelles Ende im neuen Kimble-Prozess, Heise.de. (German)
  30. ^ a b c "Department of Justice indictment, on Wall Street Journal's website". Online.wsj.com. http://online.wsj.com/article/SB10001424052970204616504577171180266957116.html. Retrieved 2012-01-27. 
  31. ^ Anderson, Nate (2012-01-20). "Arstechnica.com". Arstechnica.com. http://arstechnica.com/tech-policy/news/2012/01/google-cut-off-megauploads-ad-money-voluntarily-back-in-2007.ars. Retrieved 2012-01-27. 
  32. ^ "Google.com". Google. http://www.google.com/adplanner/planning/site_profile#siteDetails?identifier=megaupload.com. Retrieved 20 January 2012. 
  33. ^ Ira Rothkin, [1]
  34. ^ "BLM Perfect 10, Inc. v. Megaupload Limited et al". Freecourtdockets.com. January 31, 2011. http://freecourtdockets.com/DocketSummaries/BLM-Perfect-10-Inc-v-Megaupload-Limited-3-11-cv-00191-California-Southern-Federal-District-Court-Docket-Case-Summary-39463.htm. Retrieved January 19, 2012. 
  35. ^ Sandoval, Greg (November 3, 2011). "Megaupload settles copyright suit with porn studio". CNET News. http://news.cnet.com/8301-31001_3-57317577-261/megaupload-settles-copyright-suit-with-porn-studio/. Retrieved January 19, 2012. 
  36. ^ MegaUpload Attorney Speaks on Universal Lawsuit Billboard.
  37. ^ Universal: Artists didn't consent to Megaupload video CNN
  38. ^ Masnick, Mike (December 16, 2011). "An Explanation For Why UMG May Be Right That It Can Pull Down MegaUpload's Video". Techdirt. http://www.techdirt.com/articles/20111216/01463417102/explanation-why-umg-may-be-right-that-it-can-pull-down-megauploads-video.shtml. Retrieved January 19, 2012. 
  39. ^ "Universal has no special takedown privileges says YouTube". thecmuwebsite.com. December 20, 2011. http://www.thecmuwebsite.com/article/universal-has-no-special-takedown-privileges-says-youtube/. Retrieved January 19, 2012. 
  40. ^ "Megaupload Mega Song HD". YouTube. http://www.youtube.com/watch?v=o0Wvn-9BXVc. Retrieved January 19, 2012. 
  41. ^ Justice.gov
  42. ^ Sandoval, Greg (January 20, 2012). "FBI charges Megaupload operators with piracy crimes". CNET News. http://news.cnet.com/8301-31001_3-57362152-261/fbi-charges-megaupload-operators-with-piracy-crimes. Retrieved January 19, 2012. 
  43. ^ "Megaupload founder arrested in Auckland, site shut down". 3news.co.nz. January 19, 2012. http://www.3news.co.nz/Megaupload-founder-arrested-in-Auckland-site-shut-down/tabid/412/articleID/240007/Default.aspx. Retrieved January 19, 2012. 
  44. ^ 3news.co.nz
  45. ^ Gay, Edward (Wednesday Jan 25, 2012), "Bail declined for Kim Dotcom", The New Zealand Herald, http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10780967, retrieved January 25, 2012 
  46. ^ Johnston, Kirsty; Levy, Danya (Wednesday Jan 25, 2012), "Kim Dotcom denied bail, to appeal", Stuff (Fairfax New Zealand), http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10780967, retrieved January 25, 2012 
  47. ^ "Campbell Live enters Kim Dotcom's Coatesville mansion". 3news.co.nz. February 7, 2012. http://www.3news.co.nz/Campbell-Live-enters-Kim-Dotcoms-Coatesville-mansion/tabid/367/articleID/242116/Default.aspx. Retrieved February 7, 2012. 
  48. ^ Meld je aan of registreer je om een reactie te plaatsen! (2006-12-15). "Youtube.com". Youtube.com. http://www.youtube.com/watch?v=fWSFtpP4Nbs. Retrieved 2012-01-27. 
  49. ^ "Whatever happened to...?; A look at high-tech promises, kept and broken", The International Herald Tribune, November 25, 2002
  50. ^ Dr. Kimbles Wundermaschine (German), Manager Magazin April 16, 2003
  51. ^ Lewis, Rebecca (February 14, 2010). "Multi-millionaire hacker buys Chrisco mansion". The New Zealand Herald. http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10626044. Retrieved January 21, 2012. 
  52. ^ Fisher, David (September 11, 2011). "Ministers slam door on web tycoon". The New Zealand Herald. http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10750824. Retrieved January 21, 2012. 
  53. ^ Fisher, David (June 12, 2011). "Flamboyant former hacker to settle in NZ". The New Zealand Herald. http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10731751. Retrieved January 21, 2012. 
  54. ^ funding the fireworks display for New Year 2011 in Auckland
  55. ^ From Rogue To Vogue: Megaupload and Kim Dotcom. December 18, 2011, TorrentFreak.com
  56. ^ Kim Dotcommando: Life's no game. By David Fisher, New Zealand Herald, Sunday Jan 29, 2012.

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