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Kim Dotcom remanded in custody until Wednesday

UPDATED 6.15 pm: Early in a protracted bail application - observed by the world's media - it looked as if Kim Dotcom and his three associates might be in with a chance of regaining some limited liberty.

But by the end of today's North Shore district court hearing - at which Judge David McNaughton reserved his decision, and remanded the Dotcom Four in custody until Wednesday - the scales appeared to have shifted against bail.

Crown law office lawyer Anne Toohey, on behalf of the US Government, argued vigorously against Mr Dotcom's equally persuasive Queen's counsel Paul Davison as punches ranged from the intricacies of short-barreled personal defence-style shotguns and whether he was ready to start up his "frozen" internet sites immediately, to Mr Dotcom's flight risk and his "collection" of some 35 credit cards in "multiple aliases."

Feverish activity continued behind the scenes out of court to provide ammunition as both sides thrust and parried - one on behalf of the mighty US government and the FBI, the other for the man US authorities accuse of being at the heart of the biggest intellectual property case of its kind in US history.

At one point two police arms officers came into court with a big paper bag containing an illegal short-barrelled found loaded in Mr Dotcom's "safe room," during last Friday's early morning armed police raids. A similar shotgun was found in accommodation used by Mr Dotcom's resident security boss Wayne Tempero. Judge McNaughton said he didn't need to see the firearm.

Bail applications from Bram van der Kolk, Finn Batato and Mathias Ortmann were not heard today. Judge McNaughton said he would deliver a reserved decision sometime on Tuesday.

The judge indicated that if he granted Mr Dotcom bail it would flow through to the other three and if he didn't they would remain in custody. 

Whatever decision Judge McNaughton makes it is likely to be appealed to the High Court.

UPDATED 4pm: Kim Dotcom and his three associates have been remanded in custody until Wednesday morning to allow Judge David McNaughton to deliver a detailed reserved decision on bail applications for all four men.

The judge has only heard the application for Kim Dotcom and has yet to make up his mind, but he’s indicated that what is decided for Mr Dotcom will apply to the other three defendants.

Much of the discussion in court late this afternoon was over the firearms found in Mr Dotcom's house: whether they are legal in New Zealand and how they were obtained. The seized shotguns, one of which was brought into court in a paper bag in case the judge wished to view it - he didn't  -, are known in the US as personal defence weapons for home security.

UPDATED: In a strong bail application, Mr Dotcom’s lawyer Paul Davison QC has said that the US government, including the FBI, have completely misunderstood the reality of Mr Dotcom’s business.

Mr Davison told the court the business did not involve the illegal downloading of copyright films, television series or music.

He says Mr Dotcom is not a flight risk, although he has access to helicopters and private jets and has passports in at least three nationalities under different names.

Mr Davison says Mr Dotcom would be prepared to submit himself to electronic bail (which allows a defendant to live at an approved community address, wearing an electronic anklet as part of their bail conditions, making it the pre-trial equivalent of home detention). He now has no assets to call on for surety or bond as all his assets have now been frozen.

Mr Dotcom’s primary intention now is to fight the allegations brought by the US government against him and any US government case against him will be contested.

After earlier being excluded from the court while the judge dealt with unrelated matters, media were readmitted to hear the bail argument of Mr Dotcom. The three other defendants are yet to make their cases.

Inside man
Mr Davison has revealed that the day before the police launched a dawn raid last week, a police officer called at the Chrisco mansion to discuss security matters with one of Mr Dotcom’s security advisers. He said the officer carried with him a concealed camera disguised as a pen that he used to take photographs around the property, presumably to identify any potential escape routes.

Two helicopter loads of armed offender squad members landed in the mansion courtyard and when Mr Dotcom was confronted by them banging on doors he became frightened and fled to the safe room where the police found him.

The lawyer for the US govt said Mr Dotcom was found four metres from a loaded illegal shotgun, one of two found on the premises.

The US government opposes bail pending the application for extradition because Mr Dotcom is considered to be a top end flight risk and has a high risk of re-offending.

Mr Davison countered this saying there’s no chance of reoffending as all the sites have been shut down, Mr Dotcom has no ability to restart the business and has no interest in doing so until all the allegations are sorted out.

Mr Davison says Mr Dotcom has spent millions of dollars on legal advice that said everything in his business is legal.

Two more arrests
Two other men, sought by the FBI over the case, have been located. The court heard that Sven Echternach (39) a German citizen described as head of dotcom’s business development was found in the Philippines but had returned to Germany and could not be extradited to the US.

Andrus Nomm a 32-year-old Estonian had been arrested in the Netherlands.

The US government has 45 days from last Friday (the day of arrest) in which to make their application for extradition. So far no application of evidence for extradition has been filed in a NZ court.

Because of the urgency of the matter, and while a decision on bail will be made soon, in view of today’s timing (in that the judge has to also hear the other three bail applications) it’s possible any decision on bail may not be made until tomorrow.

After considerable delays this morning, a District Court judge took the unprecedented step in removing media from the public courtroom where the bail application of the Dotcom Four will be heard.

The dotcom four are founder Kim Dotcom (aka Kim Schmitz) and three others accused of copyright infringement, money laundering and racketeering by the US Justice Department who were arrested by NZ police on Friday and remain in custody.

District Court Judge David McNaughton, clearly agitated by what he referred to as last week’s “media circus”, allowed members of the public to remain in the courtroom at the North Shore District Court, a small room with inadequate facilities for the public or the media to be present.

There were a number of delays this morning but in a move which appeared to be fuelled by exasperation, Judge McNaughton took the unprecedented step of ordering all media out of his courtroom while he dealt with other unrelated cases, in a court open to ayone other than reporters.

An NBR court reporter was shouted down by the judge when he asked why he was ordering media out of the court but letting the public stay.

When the reporter asked the judge if he would give his reasons for ordering the removal of the media, a court security officer and policewoman bore down telling him to get out.

The Dotcom Four in the dock Friday - left to right: Bram van der Kolk, Finn Batato, Mathias Ortmann and Kim Dotcom (photo: Jock Anderson).

The judge allowed members of the public, including family and supporters of the Dotcom Four, to remain.

The judge said he didn’t want to hear from the NBR reporter and ordered reporters again to go, at which point court security staff and police started calling out to media to leave the court.

In the wake of what Judge McNaughton described as last Friday’s media circus, he allowed only one television camera and one sound microphone to be present in court. All other cameras and broadcasting equipment were banned from court.

He has indicated that reporters may be allowed to return when the dotcom case begins. 

The US government has 45 days under the Extradition Act to apply to extradite the four in relation to a series of charges detailed in an indictment made public on Friday. All charges relate to the Megaupload file sharing website run by Mr Dotcom, which is alleged to have generated $US175 million profit from illegal activities.

The other three men held in custody are Megauploads chief marketing officer, Finn Batato, chief technical officer, co-founder and director Mathias Ortmann and Bram van der Kolk, who oversaw website programming and network structure.

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