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By Michael Perry
January 22, 2012 8:00 PM EST
The founder of online file-sharing website Megaupload argued in a New Zealand court Monday he was innocent on charges of internet piracy and money laundering and said authorities were trying to portray the blackest picture of him.
Kim Dotcom, a German national, also known as Kim Schmitz, argued for bail saying through his lawyer that he posed no threat of absconding or restarting his businesses.
"Mr Dotcom emphatically denies any criminal misconduct or wrongdoing, and denies the existence of a Mega Conspiracy," defense lawyer Paul Davison told the court Monday.
But prosecutor Anne Toohey said Dotcom posed a flight risk "at the extreme end of the scale" because it was believed he had access to funds, could easily arrange transport, had multiple identities and had a history of fleeing criminal charges.
Dotcom, 38, and three others, were arrested Friday after police raided his country estate at the request of the U.S. Federal Bureau of Investigation. Police cut Dotcom out of a safe room he had barricaded himself in.
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The court adjourned the hearing until later in the day as it considered certain legal issues in closed court.
The judge treated Dotcom's bail application separately from that of the other three accused. Dotcom, dressed in black pants and a tracksuit top, sat quietly in the dock with hands clasped looking at the judge as his lawyer argued for bail.
The court hearing comes as media reported that Dotcom ordered around NZ$4 million ($3.2 million) of renovations to the sprawling mansion that he leased near Auckland, with its manicured lawns, fountains, pools, palm-lined paths and extensive security.
Defense lawyer Davison argued that Dotcom's passports had been seized, his funds frozen, had co-operated with authorities, and wanted to make New Zealand his permanent home.
U.S. authorities want to extradite Dotcom on charges he masterminded a scheme that made more than $175 million in a few short years by copying and distributing music, movies and other copyrighted content without authorization. Megaupload's lawyer has said the company simply offered online storage.
The case is being heard as the debate over online piracy reaches fever pitch in Washington where Congress is trying to craft tougher legislation.
Lawmakers stopped anti-piracy legislation Friday, postponing a critical vote in a victory for Internet companies that staged a mass online protest against the fast-moving bills.
The movie and music industries want Congress to crack down on Internet piracy and content theft, but major Internet companies like Google and Facebook have complained that current drafts of the legislation would lead to censorship.
Critics of the U.S. Stop Online Piracy Act, or SOPA, and Protect IP Act (PIPA), quickly showed their opposition to the shutdown of Megaupload.com, with hackers attacking the public websites of the Justice Department, the world's largest music company Universal Music, and the two big trade groups that represent the music and film industries.
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