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Kim Dotcom

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Kim Dotcom 2,19cm 242kg
Born
Kim Schmitz

(1974-01-21) January 21, 1974 (age 50)
Kiel, Germany
NationalityGerman
Other namesKim Dotcom, Kimble, Kim Tim Jim Vestor, Mr Dotcom
CitizenshipGerman
EducationHigh school
Occupation(s)CIO, CEO (2005-2011)
Years active2005–2012
OrganizationMegaupload Ltd.
Known forFounder of Megaupload.com and sister websites
Criminal charge(s)Computer fraud; Insider trading; Embezzlement; Possession of stolen goods; Abuse of titles
Criminal penaltyMultiple suspended detentions
Criminal statusConvicted, probation served
SpouseMona
Children3[1]

Kim Dotcom (born Kim Schmitz[2] January 21, 1974[3]), also known as Kimble[4] and Kim Tim Jim Vestor,[5] is a German computer programmer and businessman who generated much publicity during the dot-com bubble and was convicted of insider trading, and embezzlement in its aftermath.[6] He is also known as the founder of Megaupload and associated sites.[7][6][8] On January 20, 2012, he was placed in the custody of the New Zealand police under charges of criminal copyright infringement related to the Megaupload site.

Early career

As a teenager, Schmitz 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.[9] That effort led to his arrest on charges of using and selling stolen calling card numbers.[10][11] In 1994, Schmitz founded a computer security company called DataProtect.[12] In 1999, DataProtect and IVM engineering presented the "Megacar", a D2 generation Audi A8 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.[13]

In 1998, Schmitz was sentenced to a probationary sentence of two years for computer fraud and handling stolen goods.[14] According to a report by News & Record, he had traded stolen calling card numbers he bought from hackers in the United States.[15] He achieved early notoriety by being the subject of an advanced-for-its-time flash animation video called Kimble Special Agent.[16]

Schmitz 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.[17][18]

He is known for his large frame as he stands 6 feet 6 inches (1.98 m) and weighs in at 285 pounds (129 kg).

Insider trading and embezzlement

In 2001, Schmitz 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.[19] Unknown to others, Schmitz did not have the funds available to invest, although the announcement caused the share value of LetsBuyIt.com to jump by nearly 300%.[20] Schmitz quickly sold the shares and profited $1.5 million as a result.[19]

Schmitz had also arranged and obtained an unsecured loan of €280,000 from Monkey AG, a company for which Schmitz 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. Schmitz expressed remorse, stating that he had been "dazzled" and had not recognized that he would be unable to repay the loans.[21]

In January 2002, Schmitz 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.[22] Schmitz also pleaded guilty to embezzlement in November 2003 and received a two-year probation sentence.[23]

Main article: Megaupload
Megaupload.com

Megaupload Limited businesses

On 21 March 2005, Schmitz founded Megaupload Limited, a Hong Kong-based file hosting and sharing business that eventually became the 13th most popular site on the internet[24] with over 150 employees, US $175 million revenues,[25] 50 million visitors daily,[24] and estimated to be responsible at its peak for 4% of all internet traffic.[24][26]

The business branched out into other file and media sharing, including image hosting and video hosting services known as Megavideo, Megalive, Megapix and Megabox as well as CUM.com (formerly Megaporn, Megarotic, and Sexuploader) which specialised in hosting pornographic content. (Megaupload itself also allows such content). Other services included Megaclick, Megafund, Megakey and Megapay, all of which were advertisement and financial services. Two additional web sevices, Megabackup and Megamovie, were in development before their closure.[27]

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 organisation dedicated to copyright infringement.[28]

Civil litigation and controversies

He was sued for copyright infringement as owner of Megaupload.[29] A settlement was later filed.[30]

In December 2011, Schmitz'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. Schmitz 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.[8][31][32] 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.[33] This claim was later explicitly denied by YouTube,[34] which has since reinstated the video.[35]

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

On January 5, 2012[36], indictments were filed in the US against Schmitz on criminal copyright infringement charges along with Július Benčko and 5 other associates. On January 19, 2012, Kim Schmitz, Finn Batato, Mathias Ortmann and Bram van der Kolk were arrested in Coatesville, Auckland, New Zealand, by New Zealand authorities. New Zealand 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.[37][38]

Other activities

Schmitz 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.[39]

Since 2001, Schmitz 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 Schmitz tried to find investors for a hedge fund managed by the company.[40] According to media reports Schmitz never had a proper license to start the fund.[41]

In 2010, Schmitz 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,[42] but the New Zealand Government declined his application to buy the land on the basis that he did not meet the "good character" test.[43] Schmitz was granted permanent residency in New Zealand in 2010.[44][7]

An investigative piece found Schmitz 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.[6] According to Megaupload spokesperson B. Lam, Kim is one of many shareholders at Mega and not involved in most day-to-day business decisions.[6]

References

  1. ^ Dotcom birthday party targeted The New Zealand Herald, January 22, 2012
  2. ^ "The lavish life of file-sharing kingpin Kim Dotcom". news.com.au. 22 January 2012. Retrieved 23 January 2012.
  3. ^ "Der Unfassbare", Berliner Morgenpost, February 12, 2001 Template:De icon
  4. ^ Kimble bleibt stumm Template:De icon January 23, 2001
  5. ^ Dearnaley, Mathew (December 31, 2010). "Dark horse to light up New Year". The New Zealand Herald. Retrieved June 12, 2011.
  6. ^ a b c d Wishart, Ian (April 2010). "Merry Chrischmitz or Merry Hell?" (PDF). Investigate. Retrieved December 31, 2011.
  7. ^ a b Sandoval, Greg (August 4, 2011). "The mystery man behind Megaupload piracy fight". CNET News. Retrieved January 19, 2012.
  8. ^ a b Megaupload threatens to sue Universal over YouTube video Guardian
  9. ^ William Flanagan and Brigid McMenamin “The Playground Bullies are Learning How to Type” Forbes magazine, pp. 182-189, December 21, 1992
  10. ^ Brigid McMenamin, “Fallen hacker,” Forbes magazine, p. 12, June 20, 1994
  11. ^ McMenamin, Brigid (June 20, 1994). ""Fallen hacker"". Forbes. {{cite news}}: Unknown parameter |access date= ignored (|access-date= suggested) (help)
  12. ^ Pressetext: Start-up der Woche - Megacar Template:De icon
  13. ^ Tomshardware.de Template:De icon
  14. ^ Zugriff in Bangkok Template:De icon, Manager Magazin, January 18, 2002
  15. ^ "$50 Million Fraud Charges", News & Record, November 1, 1994
  16. ^ Shanklin, Will (Jan. 20, 2012). "A closer look at Kim Dotcom, the larger-than-life founder of Megaupload". Geek.com. Retrieved January 20, 2012. {{cite web}}: Check date values in: |date= (help)
  17. ^ Kimvestor bringt den TÜV in Erklärungsnot Template:De icon, Handelsblatt, February 6, 2001
  18. ^ TÜV Data Protect beantragt Insolvenz Template:De icon. ZDNet. September 25, 2001
  19. ^ a b Haftstrafe für Schmitz? Template:De icon, Der Spiegel 5/2002, January 28, 2002
  20. ^ "Rekordanstieg bei Letsbuyit" Template:De icon Manager-Magazin, January 25, 2001
  21. ^ "Alle haben mit Geld um sich geworfen" Template:De icon Manager-Magazin, November 11, 2003 - "Ich war dadurch geblendet", sagte sich Schmitz ("I was dazzled by it")
  22. ^ Luring German Investors Back Into The Pool, Business Week, April 12, 2004.
  23. ^ Schnelles Ende im neuen Kimble-Prozess, Heise.de. Template:De icon
  24. ^ a b c Department of Justice indictment, on Wall Street Journal's website
  25. ^ Arstechnica.com
  26. ^ "Google.com". Google. Retrieved 20 January 2012.
  27. ^ "MegaWorld". Archived from the original on 23 July 2011. Retrieved 19 January 2012.
  28. ^ Ira Rothkin, [1]
  29. ^ "BLM Perfect 10, Inc. v. Megaupload Limited et al". Freecourtdockets.com. January 31, 2011. Retrieved January 19, 2012.
  30. ^ Sandoval, Greg (November 3, 2011). "Megaupload settles copyright suit with porn studio". CNET News. Retrieved January 19, 2012.
  31. ^ MegaUpload Attorney Speaks on Universal Lawsuit Billboard.
  32. ^ Universal: Artists didn't consent to Megaupload video CNN
  33. ^ Masnick, Mike (December 16, 2011). "An Explanation For Why UMG May Be Right That It Can Pull Down MegaUpload's Video". Techdirt. Retrieved January 19, 2012.
  34. ^ "Universal has no special takedown privileges says YouTube". thecmuwebsite.com. December 20, 2011. Retrieved January 19, 2012.
  35. ^ "Megaupload Mega Song HD". YouTube. Retrieved January 19, 2012.
  36. ^ Justice.gov
  37. ^ Sandoval, Greg (January 20, 2012). "FBI charges Megaupload operators with piracy crimes". CNET News. Retrieved January 19, 2012.
  38. ^ "Megaupload founder arrested in Auckland, site shut down". 3news.co.nz. January 19, 2012. Retrieved January 19, 2012.
  39. ^ Youtube.com
  40. ^ "Whatever happened to...?; A look at high-tech promises, kept and broken", The International Herald Tribune, November 25, 2002
  41. ^ Dr. Kimbles Wundermaschine Template:De icon, Manager Magazin April 16, 2003
  42. ^ Lewis, Rebecca (February 14, 2010). "Multi-millionaire hacker buys Chrisco mansion". The New Zealand Herald. Retrieved January 21, 2012.
  43. ^ Fisher, David (September 11, 2011). "Ministers slam door on web tycoon". The New Zealand Herald. Retrieved January 21, 2012.
  44. ^ Fisher, David (June 12, 2011). "Flamboyant former hacker to settle in NZ". The New Zealand Herald. Retrieved January 21, 2012.


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