Police and FBI agents have finished searching the home of a multi-millionaire New Zealand resident at the centre of an alleged global piracy and money laundering conspiracy, after seizing millions of dollars worth of luxury items.
Kim Dotcom, also known as Kim Schmitz, was arrested yesterday by police in the FBI-led raid on the $30 million mansion he lives in with his family in Coatesville, north of Auckland.
Police spent most of the day at the property, seizing assets such as luxury cars and artwork, as well as computers and documents as evidence.
The assets have been passed to the control of the Official Assignee, although police said some of the larger items remained at the property and would be removed in the coming days.
Police have also confirmed that they found two firearms at the property yesterday and a 55-year-old New Zealand man was charged with unlawful possession of a pistol, before being released on police bail.
The US led investigation into criminal copyright infringement, which also involved local police and Organised & Financial Crime Agency New Zealand (OFCANZ), finished its search at the Coatesville property shortly before midnight last night.
Detective Inspector Grant Wormald of OFCANZ said the team will continue working at the North Shore Policing Centre through the weekend.
"Our focus now is on completing all the documentation required by Crown Law ahead of the next court appearance on Monday.
He confirmed that the team of four FBI staff working on the searches would also continue to do so "for the next few days".
Nothing to hide
Yesterday, Dotcom - the founder of Megaupload, one of the largest file sharing sites on the internet - said he had "nothing to hide".
The American agents had been working with New Zealand police on the case since August last year. It is alleged that Dotcom and six others are part of a group called the "Mega Conspiracy", accused of reproducing and distributing infringing copies of copyrighted works - including movies, television programmes, music, software and books.
More than $100 million in assets has been seized worldwide.
In New Zealand, $6 million-worth of luxury cars - including 15 Mercedes Benz, a 1959 pink Cadillac and a Rolls-Royce Phantom - and $10 million held in several financial institutions have been seized.
The move against Megaupload sparked an immediate and furious reaction from hackers who shut down websites around the world, among them the US Department of Justice site.
Also arrested were Bram van der Kolk, 29, who is from the Netherlands but is a New Zealand resident, and Finn Batato, 38, and Mathias Ortmann, 40, both from Germany.
The FBI will now seek to extradite the men back to the United States to face charges of conspiring to commit racketeering, conspiring to commit money laundering, copyright infringement and aiding and abetting copyright infringement.
In the North Shore District Court, Judge David McNaughton remanded the men in custody until Monday morning for a bail hearing.
Lawyers acting for the US Government are opposing bail.
Lawyers for the accused men tried to stop news media taking photographs of their clients in court.
But as Judge McNaughton was addressing the matter, Dotcom - who had been smiling and winking at a woman in the public gallery - interrupted him.
"We don't mind ... if people want to take photographs of us or cover this event because we've got nothing to hide."
Dotcom, a dual citizen of Finland and Germany, made $42 million in 2010 from the Megaupload site, according to the indictment laid by American authorities.
Last year, the Government blocked him from buying the sprawling Coatesville mansion because he did not meet the "good character" requirement applied to foreigners who want to buy New Zealand land.
The MegaUpload site was shut yesterday but previously contained endorsements from celebrities such as Kim Kardashian, Alicia Keys, Kanye West among others.
Nearly 80 police, including officers from the the Organised and Financial Crime Agency, raided 10 properties yesterday to make the arrests after a request from the FBI.
Yesterday, the Weekend Herald saw luxury cars with the licence plates KIMCOM, HACKER, STONED, GUILTY, MAFIA, GOD and POLICE loaded on to transporters.
According to the indictment on the US Justice Department website, the harm to copyright holders is put at more than US$500 million ($623.2).
It is alleged Megaupload generated more than US$175 million in criminal proceeds.
The indictment contains emails allegedly sent between the arrested men in which they respond to complaints from users.
An email purportedly sent by Dotcom in July 2010, claims he was worried by a crackdown on sites thought to contain pirated content.
He wrote: "This is a serious threat to our business. Please look into this and see how we can protect ourselfs [sic]. Should we move our domain to another country (Canada or even Hong Kong)."
The indictment claims the accused men knew the site contains unauthorised content.
In a February 2011 email, Ortmann sent Dotcom and Van der Kolk an article headed "how to stop domain names being seized by the US government."
Another email allegedly sent by , Ortmann said: "We're not pirates, we're just providing shipping services to pirates."
Detective Inspector Grant Wormald said Dotcom had put money into Government bonds, and expensive artworks had been found at the Coatesville mansion.
Mr Wormald said the raid of Dotcom's house went smoothly - despite problematic obstacles at the property including tight security, gating and a bodyguard.
A team of 76 police staff including armed offenders squad members went to the sprawling property at about 6.45am.
FBI officers, who have been in New Zealand for about five days, did not participate.
They were expected to stay here for another week or so.
"It's a huge property and we were aware that there were a number of people there," Mr Wormald said.
"Police arrived in two marked helicopters. Despite our staff clearly identifying themselves Mr Dotcom retreated into the house and activated a number of electronic locking mechanisms.
"While police neutralised these locks he then further barricaded himself into a safe room within the house which officers had to cut their way into.
"Once they gained entry into this room they found Mr Dotcom near a firearm which had the appearance of a shortened shotgun.
"It was definitely not as simple as knocking at the front door."
Among the movies allegedly made available on publicly accessibly websites, therefore infringing copyright, were:
* Bad Teacher
* Harry Potter and the Deathly Hallows Part 1
* Lord of the Rings: Fellowship of the Ring
* The Twilight saga: Breaking Dawn
* The Green Hornet
Some of the movies were made accessible days after their release or before they were commercially released.