Wrong Paperwork Used to Seize Megaupload Property, Judge Says

[Teh One Who Knocks]

By Jeremy Kirk, IDG-News-Service:Sydney-Bureau


An order granted to law enforcement allowing them to seize luxury cars and other personal effects from the estate of Megaupload founder Kim Dotcom is invalid, a judge in New Zealand ruled on Friday.

A police commissioner applied for the wrong type of seizure order, requested by the U.S., which now is "null and void and has no legal effect," Judge Judith Potter ruled.

The ruling means Dotcom has a chance to recover some of the items, which reportedly included a Rolls Royce and a pink Cadillac, seized during his Jan. 20 arrest at his mansion outside Auckland. It was unclear on Monday the next step Dotcom would have to take to get his property returned, and his attorneys could not immediately be reached.

Dotcom, 38, faces extradition to the U.S. on various copyright infringement and money laundering charges relating to his website Megaupload, a file-sharing and storage website, which was shutdown in January.

New Zealand police applied for a second order to seize more of Dotcom's property and, after realizing the mistake, tried to include the property improperly seized under the first order, Potter wrote.

Dotcom's attorneys argued that some or all of their client's property should be released. But representatives acting for the U.S. said the subsequent seizure order, dated Feb. 1, is sufficient for holding Dotcom's property.

Extradition proceedings for Dotcom, who is free on bail but subject to electronic monitoring, are expected to begin in August.

The U.S. Department of Justice alleges Megaupload collected US$175 million in criminal proceeds, rewarding users for uploading and sharing content without the permission of copyright holders.

Also charged are Megaupload defendants Finn Batato, Julius Bencko, Sven Echternach, Mathias Ortmann, Andrus Nomm and Bram Van Der Kolk.

[Pony]

Would that mean any evidence they gathered from the seized property is inadmissible in court?

[Teh One Who Knocks]

Dunno if the court order in question refers to just his personal property they seized or if it includes all the data on the servers as well.

[redred]

the report make it sound like it's just his own stuff from his house imo,but if they've messed up on that bit makes you wonder if they've done anymore fuck up's

[Teh One Who Knocks]

That would be my guess, that it only concerns his personal property that was seized, the article just doesn't make a good distinction about it.

[PorkChopSandwiches]

Now his lawyers have an "in" and can break down this whole thing.

[Teh One Who Knocks]

That's what I would do if I was his legal team, challenge absolutely everything.

[PorkChopSandwiches]

Yep, you can see they have made mistakes from the get go now

[Arkady Renko]

Apparently the mistake the prosecution made here is close to irrelevant. They are merely required to file the paperwork again, now using the proper forms. Doesn't keep them from using anything they found in court.

[Hal-9000]

An old cop saying ...If you're going after a rich man, you'd better make sure all the T's are crossed and I's are dotted, twice.

[Deepsepia]

Would that mean any evidence they gathered from the seized property is inadmissible in court?

Unclear -- but seemingly not important.

Kim Dotcom is not being prosecuted because of evidence gathered in the raid, rather these were assets that were the fruit of illegal activities.

The evidence him was gathered over more than a year . . . Megaupload did a really dumb thing, which basically lost them the safe harbor protections of the DMCA.


Here's what the NZ press is saying about this story:



Police commissioner Peter Marshall and the Government's legal advisers at the Crown Law Office have admitted making an embarrassing "procedural error" when filing documents to seize Dotcom's property.

Potter said Marshall's application for the restraining order had "confused" legal moves by opting for one in which Dotcom was not given a chance to mount a defence. It meant Marshall applied for the "incorrect order".

Potter said he had sought to correct the mistake after the raid by applying for the proper order, retrospectively listing assets already seized.

The new order had been granted on a temporary basis, but Potter said she would soon rule on whether the mistake meant the internet mogul should get his property back.

A briefing on the mistakes has been made to Attorney-General Chris Finlayson - who is also the minister in charge of the Crown Law Office.

It was his legal authority that was used by Crown Law to authorise the seizure of the goods, which was undertaken by police and the Official Assignee.

The raid led to Dotcom's Megaupload sites - which carried 4 per cent of internet traffic - being pulled down and $200m in assets seized. A fascinated public watched as officials took a string of luxury cars from the $30 million mansion in North Auckland where Dotcom, wife Mona and their three children lived.

The seizure left Dotcom with no finances to mount a legal challenge against claims he had overseen the biggest criminal copyright operation in history.

On January 30, Crown lawyer Anne Toohey wrote to the court to explain the wrong sort of restraining order had been applied for, saying a "procedural error" had occurred.

Toohey enclosed new legal papers to seek a replacement restraining order and outlined five errors with the initial application.

Court papers showed Marshall accepted the initial order "may well be a nullity".

However, the Crown submitted that new orders granted meant the previous errors didn't matter as the property was still restrained.

Dotcom's legal team, including Simpson Grierson senior partner Willie Akel, challenged the error, stating the seizure of the property was "unlawful".

Court papers show Akel stating Dotcom's belongings and fortune "must be released" because it was "unlawfully seized and restrained under the order".

A spokesman for the Attorney-General said Finlayson was briefed on the issue, apparently in early February.

Dotcom's legal team were unwilling to comment on the decision.

The move would be seen as a new victory for Dotcom. Earlier, Paul Davison QC had successfully over-turned the insistence Dotcom should be held in jail, rather than bailed, before an extradition hearing expected within six months.

But Dotcom is not guaranteed to get his property back.

Canterbury University professor Ursula Cheer said the law made allowances for mistakes and the case would only be fundamentally affected if Dotcom's lawyers were able to produce evidence showing a lack of good faith.