New Zealand court: Megaupload founder can hold on to property

New Zealand court: Megaupload founder can hold on to property
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A judge in New Zealand has said that Kim Dotcom, the founder of now-defunct file-sharing service Megaupload, who is facing federal charges, does not have to forfeit his property, despite the order of a U.S. judge.

It’s a blow to federal prosecutors, who were hoping to force Dotcom to comply with the order of a federal judge in Virginia, Ars Technica reported on Wednesday.

The Virginia judge ruled in March that Dotcom had lost the case over forfeiting his property by default. But a judge on the High Court of New Zealand, Auckland Registry, found the legal theory being used by American authorities was not recognized in New Zealand.

That will allow Dotcom to keep, for now, the property sought by U.S. prosecutors — including, among other things, assets from his bank accounts, a house and multiple jet skies.

“This is a blow to the [United States government] strategy designed to starve me out,” Dotcom told Ars Technica in an email.

The Justice Department declined to comment.

Dotcom is facing federal charges, including copyright infringement and money laundering, related to Megaupload. He has been fighting his extradition from New Zealand since his arrest in 2012. He is currently scheduled to be extradited in September.

Prosecutors brought the civil forfeiture case in 2014. It is not uncommon for federal prosecutors to try to seize property they view as profits of crime.