David Fisher

Senior reporter of the year

Dotcom arrest costs taxpayer $70,000 - so far

Megaupload founder Kim Dotcom. Photo / Sarah Ivey
Megaupload founder Kim Dotcom. Photo / Sarah Ivey

Taxpayers spent about $70,000 on the operation to arrest Kim Dotcom and seize his luxury cars and art.

The cost doesn't include the cost of police staff, Crown lawyers acting on behalf of the United States or time spent in court.

The January 20 raid set in motion the US Department of Justice case against Dotcom. The United States is trying to extradite Dotcom on charges of criminal copyright violation relating to his file-sharing Megaupload website.

Figures gained under the Official Information Act show police estimated the cost of arresting Dotcom at $11,482. The figure did not include police salaries.

The cars and luxury items taken from the home set taxpayers back another $62,271 with $25,000 alone spent on moving Dotcom's more expensive belongings.

Insurance for the belongings for seven weeks, which include an estimated $6 million in cars, had cost about $6800 even though they have been securely shut away in a warehouse since being seized.

Dotcom was an enthusiastic collector of luxury cars, ranging from a 2008 Rolls-Royce Phantom Coupe to a 1959 Cadillac El Dorado. He also had a collection of late-model Mercedes.

Once prized possessions, the cars are now expected to be auctioned in a deal struck between Dotcom's lawyers and Crown lawyers acting for the US.

The auction would be carried out with only a few cars at a time to avoid devaluing the collection.

Even though the case might be costing taxpayers, New Zealand does stand to come out ahead if Dotcom is convicted in the US.

The goods are frozen but a successful conviction could see his fortune forfeited as tainted criminal proceeds.

Official Assignee Guy Sayers said there was no mechanism for funds seized by Dotcom to be transferred to the US. He said forfeited goods would be transferred to the New Zealand government and become part of the Crown accounts.

A failed case by the US would leave the taxpayer exposed. Police commissioner Peter Marshall last week gave the High Court formal notice it would be the focus of any liability case by Dotcom if he were to sue.

Meanwhile, Dotcom has filed legal papers in US courts after moves to allow Megaupload's databases to be wiped.

Megaupload's members stored their files on more than 1100 computer servers owned by Carpathia Hosting, the company which was raided by the FBI as Dotcom was being arrested.

The FBI told Carpathia Hosting it could wipe the servers because snapshots of data from two of the servers was enough to prosecute Dotcom and his colleagues.

Carpathia sought a ruling from the court because keeping the data was costing it money - but deleting it could leave it open to a law suit.

Dotcom said the US government was allowing destruction of evidence to be used by the defence. He said Megaupload had wanted to buy Carpathia Hosting's servers for $1.4 million but the Department of Justice would not relax the freezing order to allow the money to be used.

The court papers state the FBI didn't explore the servers to look for evidence "beyond loading up to prove its case" and was now trying to block similar investigations by the defence.

BIG NUMBERS

* $70,000 was spent on the operation to arrest Kim Dotcom and seize his luxury cars and art.
* This didn't include the cost of police staff, Crown lawyers acting on behalf of the United States or time spent in court.
* Cars and luxury items taken from the home cost another $62,271.
* $25,000 was spent on moving Dotcom's more expensive belongings.

- NZ Herald

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