Kim Dotcom is currently charged with earning hundreds of millions in illegal profits from his Megaupload and Megavideo.com sites.

But to the Internet mogul's old neighbors, Kim Dotcom (born Schmitz) is something else: the man who sent them an e-mail joking about cocaine use, infiltrating their families, and hacking into their e-mail accounts.

Kim Dotcom vs. Neighborhood Watch

Dotcom sent the note after residents of the swanky New Zealand suburb where he lived caught sight of his fancy cars (bearing license plate names like HACKER, MAFIA and GUILTY) and grew suspicious about their new neighbor.

They Googled the 38-year-old German national, already making millions off Megavideo and Megarotic. They found out about his past as a hacker, and about his criminal conviction for insider trading.

But when they voiced their concerns to the owner of the mansion, he forwarded the e-mail to its new resident, who jotted off a reply, joking about hacking, cocaine use and money laundering.

None of Dotcom's neighbors were laughing.

'A criminal Neighbor like me'

Dear Neighborhood-watch, the e-mail began. It was dated April 21, 2010. As you all know I recently moved into the Neighborhood and I am a former hacker.

Well I was just hacking into a local mail server and guess what I found.

Dotcom went on to mockingly reassure the local residents that there were significant benefits to having a criminal Neighbor like me.

1. Our newly opened local money laundering facility can help you with your tax fraud optimization, he wrote.

2. Our network of international insiders can provide you with valuable stock tips.

3. My close personal relations with other (far worse) criminals can help you whenever you have to deal with a nasty Neighbor.

'Hardly the crimes you start a witch hunt for'

Later on, Kim Dotcom got serious, and assured his neighbors that he'd meant no harm.

My wife, two kids and myself love New Zealand and 'We come in peace', he wrote.

Mentioning Megaupload, which he called a successful Internet company, Dotcom reassured his readers that he hadn't been a hacker for 15 years, and that he was convicted for insider trading a decade ago.

Hardly the kind of crimes you need to start a witch hunt for, he commented.

Kim Dotcom also slammed the media for what he claimed was biased coverage of his character and his past. Just look what the media did to this Neighborhood, he wrote in the e-mail. Scary.

'Don't forget to bring the cocaine (joke)'

But Dotcom finished by returning to the jocular tone he had adopted at the start.

Now you can make a choice, he told the neighbors.

1: Call Interpol, the CIA, and the Queen of England and try to get me on the next plane out of New Zealand.

2: Sit back, relax and give me a chance to do good for New Zealand and possibly the Neighborhood.

Dotcom ended the email by inviting his neighbors over for coffee to get to know him better.

And don't forget to bring the cocaine (joke), he finished. All the best, Kim.

Neighbors Not Amused

In hindsight, it seems pretty clear that the Megavideo giant was doing little more than ribbing his neighbors for their concern.

All he appeared to be trying to accomplish was to break the ice by acknowledging and mocking both his past and his neighbors' reactions to it.

Those who received the e-mail had a rather different reaction.

[Dotcom's e-mail] scared the hell out of everybody, said France Komoroske, a retired lawyer.

When one neighbor asked if he was serious about hacking their e-mail accounts, he replied: Do you really think I hacked your emails? Nonsense. One of my agents has infiltrated your family :-).

Komoroske has continued to look into Dotcom's past since his arrival. She says she's shocked that New Zealand allowed him to stay in the country.

New Zealand doesn't seem to care about moral character if you've got enough bucks, she said.

'All I thought was he had a funny number plate'

At least one neighbor, however, didn't see the harm in the e-mail exchange, and said she never felt frightened of Dotcom or threatened by him.

We see him driving around, but he keeps to himself and we're quite close neighbors, Libbi Darroch told Reuters. All I thought was he had a funny number plate.

Dotcom was denied bail Wednesday by a New Zealand judge as he works to prove his innocence in the so called Mega Conspiracy.

Before being arrested, he lived a lavish, playful lifestyle, partying all over the world and frequently posting pictures and videos of his escapades online.