DOJ: Dotcom could face new charges if he launches new service

The agency questions Dotcom's plans to launch a service similar to Megaupload

Megaupload founder Kim Dotcom could violate the terms of his bail, or face new criminal charges, if he launches a new file-sharing and storage service as planned, the U.S. Department of Justice said in a court filing this week.

Dotcom, who said earlier this month he plans to launch a service called Mega, would renege on assurances he made to a New Zealand court before he was granted bail in the DOJ's copyright infringement case against him and Megaupload, the DOJ said in a court document filed late Wednesday.

"Defense Counsel's claim that the corporate defendant can and should be allowed to operate undermines the sworn statements of Dotcom that he has no plans or ability to continue to operate or fund the businesses in the Indictment during pendency of the extradition process," the DOJ's lawyers wrote in a court filing opposing a motion by Dotcom's lawyers to dismiss the case against Megaupload. "If defendant Dotcom intentionally misled the court in New Zealand about his intentions and capabilities in order to obtain his release from pre-extradition confinement, it seems Defense Counsel's representation might endanger Dotcom's bail situation or even subject him to additional charges."

Dotcom, in a January affidavit given in New Zealand, said he had no plans to relaunch Megaupload or a similar service until the DOJ's case against him is resolved.

"There is no realistic prospect or possibility of restoring the business or recommencing the business having regard to both the seizure of the requisite servers and data storage equipment and to the seizure of all funds, monies and assets held both by Megaupload and by me personally," he said then."Further, it is likely that users would consider any new iteration of Megaupload as inherently unreliable as it could be subject to a further incident in which the US government takes action to close the site down and thereby prevents users from having legitimate access to their data."

Ira Rothken, a lawyer representing Dotcom and Megaupload, dismissed the DOJ's assertions. Dotcom has a "top-notch" legal team in New Zealand working with the court there to assure that he complies with the terms of his bail, Rothken said.

The DOJ's suggestion that Dotcom could face new criminal charges lacks merit, he added.

"It sounds like the United States is attacking a technology before they fully investigate it," Rothken said. "This looks to be the second time they're doing that. Kim Dotcom is innocent, and he's entitled to be involved in technology and business."

The DOJ has accused Dotcom and Megaupload of running a massive file-sharing operation infringing the copyrights of many U.S. companies. In January, the agency seized the website and charged Dotcom and three other executives with conspiracy to commit racketeering, copyright infringement and money laundering.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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Tags U.S. Department of JusticeInternet-based applications and servicesmegauploadintellectual propertycopyrightKim DotcomIra RothkenlegalinternetCriminal

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