Megaupload programmers cop a plea in New Zealand to avoid extradition

The decade-long legal brawl over cloud storage locker Megaupload has moved a little closer to resolution after two of the outfit's execs pled guilty to a variety of charges.

Megaupload, fronted by colorful entrepreneur Kim Dotcom, offered users the chance to upload files and store them in a cloud. Files could then be made available to other members. The outfit's heyday was the mid-2000s – a time when plenty of content was available using BitTorrent and before content streaming services offered easy and affordable access to content online.

To build up its content, Megaupload did little to prevent users uploading and sharing copyrighted materials – and even paid incentives to users who did so. The presence of choice content attracted more users, some of whom subscribed and helped make money for Megaupload. Over 90 percent of Megaupload users never uploaded files, but did download material.

Big Content of course deluged Megaupload with copyright-related lawsuits, which have been rumbling along for over a decade as Dotcom and his associates argued they should not be held responsible for users' uploads.

US authorities and Big Content have pointed to Megaupload's payments to uploaders of stolen content as evidence the outfit intended to profit from copyright abuse. They attempted to extradite Dotcom and his associates from New Zealand to face American courts.

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Yesterday, two of those associates – Mathias Ortmann and Bram van der Kolk, both programmers for Megaupload – pled guilty in New Zealand's High Court.

As the sentencing notes [PDF] in the case explain, the pair's role as developers meant they understood Megaupload's operations and intentions. After years of legal action they agreed to plead guilty, and assist US authorities, in return for extradition proceedings ending.

The notes state that the pair "have promptly and fully complied with all of your obligations to date under those arrangements."

The charges laid against Ortmann and van der Kolk have maximum sentences of between five and ten years.

Justice Fitzgerald consider the pair had demonstrated remorse, had gone straight – ironically by building a legit cloud storage called "Mega" – and had personal mitigating factors.

Ortmann was therefore sentenced to two years and seven months' imprisonment and van der Kolk will spend two years and six months at His Majesty's pleasure. Both pled guilty to obtaining documents dishonestly, conspiring to cause loss by deception, and participation in an organized criminal group. The pair must also forfeit funds held in Hong Kong, where Megaupload operated for a time.

Kim Dotcom – who has become an enthusiast for cryptocurrencies and right-wing conspiracy theories – continues to fight extradition attempts. On his Twitter account he claimed the sentencing validates his theory that copyright law can't touch him. He's proven that theory right for over a decade, and may yet elongate his defiance.

While New Zealand courts have ruled he can be extradited to the US, doing so will require ministerial action – and there's little sign the matter is high on the relevant politician's to-do list. Even if the minister signs off on extradition, Dotcom is likely to appeal. ®