The first of the seven men accused of running the defunct Megaupload as a global only piracy enterprise has been arrested in the United States, prompting speculation he has cut a deal and will testify against Kim Dotcom.
Court documents obtained by the Herald show Andrus Nomm, 36, was arrested in the United States at a time Dotcom's lawyer believed he was in the Netherlands.
Mr Nomm had been awaiting an extradition hearing in the Netherlands and the timing of his arrival in the US was "unexpected", said Dotcom's lawyer and internet law specialist Ira Rothken.
He said Mr Nomm "either agreed to come to the US or is involved in some sort of deal".
"Given he didn't have anymore resources, it was expected the US would take advantage. This is to be expected where the US Department of Justice, in an experimental case, is trying to get folks scared and to testify in certain ways.
"If these folks testify truthfully it would be of no benefit to the US."
The Herald is aware of efforts by the FBI to secure testimony from staff who had worked for Dotcom.
But it would be a major coup for the case if the FBI had secured testimony, or a plea bargain deal, with one of the seven Megaupload accused.
Four of the accused - including Dotcom - await an extradition hearing in New Zealand on charges of criminal copyright violation, moneylaundering and racketeering which is currently scheduled for June 2015. Two others are unable to be extradited to the US - one is in Slovakia and another in Germany.
Mr Rothken, who has represented Dotcom for years, said Nomm was an Estonian who was in the Netherlands at the time of the 2012 raids which saw the Megaupload website shut down.
He had been on bail in Rotterdam since his arrest but had struggled to find enough work, he said.
"He was out of funds and in a country that was foreign to him," said Mr Rothken.
He said Nomm was "vulnerable" and "the US took advantage of that".
Mr Rothken said the Megaupload legal team was trying to find out if Nomm was being kept in custody and to make contact if it could.
Nomm, a programmer, stated in an online profile he had worked for Megaupload from 2006 until it was shutdown. He listed his roles as developing new cloud-based services, research new technologies and the tracking of unwanted material posted to the site.
The FBI indictment recorded Nomm as getting $100,000 from Megaupload in 2010 - the same year Dotcom pulled in $40m.
Meanwhile, leading Auckland lawyer Ron Mansfield has confirmed he is acting for Dotcom after his legal team withdrew last year. He said he was currently building a legal team to handle the myriad of Dotcom-related cases but the extent to which the Megaupload founder could be represented depended on getting seized funds released.
Mr Mansfield, who is known for his pro bono work, said it was such a sprawling case it required funding. An application to the High Court to release some of the seized $10m still in New Zealand would be heard in late February.
January 2012: A global raid sees seven people arrested for their connection to Megaupload, an internet filesharing site which claims to carry 4 per cent of the world's internet traffic. Tycoon Kim Dotcom and three others are arrested in New Zealand.
December 2013: The US releases publicly a 191-page account of evidence against the seven, showing it has complete access to years or email communications.
February 2015: The first of the seven is arrested in the US at a time when he is expected to be awaiting extradition in the Netherlands.
June 2015: Dotcom and three others face an extradition hearing in NZ to face the charges in the US.
What are the charges?
The seven face a range of charges from criminal copyright infringement through to racketeering and moneylaundering. The charges are arranged like a pyramid - if the US proves criminal copyright violation, then Megaupload's finances and conduct are also criminal. If they don't prove the copyright claim, the charges all collapse.
Why is it taking so long?
A range of reasons from prosecution blunders and a determination on both sides to test every aspect in court. Expect it to take longer. In NZ, after the extradition, there is the prospect of appeals, appeals and appeals.
Is the case clear cut?
Not at all. Critics argue the US is trying to prove second degree copyright violation - that is, Megaupload didn't violate copyright but its users might have done. There is no such crime in the US, so it's a hard one to prove. The prosecution argues Megaupload was geared towards illegal copyright, and so is complicit to its users abuses.
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