Kim Dotcom sold shares to pay for defence

The larger-than-life Mega mogul swapped his huge leather lounger for the more austere seating of the witness box this afternoon. Photo / Jason Oxenham

Kim Dotcom sold shares in his new companies for about $20 million in 2013 to pay for his defence team and provide for his family, he has told a court.

The larger-than-life Mega mogul swapped his huge leather lounger for the more austere seating of the witness box at the North Shore District Court this afternoon.

Dotcom's extradition hearing has been effectively paused, after the US government detailed its case, while defence lawyers make various arguments for a stay of proceedings.

Counsel for the US government Christine Gordon, QC, opened the case by calling it a "simple scheme of fraud" where users of the Mega websites widely shared copyright-protected material under the noses of those running the company.

The FBI laid charges in January 2012 when the German mogul and three others - Mathias Ortmann, Bram van der Kolk and Finn Batato - were indicted on 13 charges including copyright infringement, racketeering, money laundering and fraud.

This afternoon Dotcom described himself as an "internet entrepreneur" and was grilled by Crown lawyer Mike Ruffin, acting on behalf of the US government.

He told the court about setting up Mega Ltd with Ortmann and van der Kolk and music company Baboom in 2013, shares in which he sold for about $20 million.

Dotcom said the ventures were "born out of necessity" to pay for the drawn-out extradition battle and also to secure his family's future with contributions to the family trust, the Trust Me Trust.

His ill-fated involvement in the Internet Party was also discussed.

Dotcom said he donated up to $4.8 million during its brief existence and Mr Ruffin asked why he had not put some of that money aside to pay for US legal experts he now claimed were vital to defending his case.

"If I had a crystal ball and I could see the future, in hindsight I could have done that," Dotcom said.

"But at the time, for me, there was no reason to believe there wasn't more unrestrained funds coming from my business ventures."

His lawyer Ron Mansfield is arguing there should be a stay of proceedings because the Crown - on behalf of the US government - adopted a "starve out" policy which restricted Dotcom's funds being used to recruit US technical and legal scholars to help his case.

Earlier today, Dotcom's US attorney Ira Rothken said they would need about US$500,000 to get the people they needed and it could take up to six months to gather all the evidence required from them.

Mr Ruffin also asked the defendant why he had not used money from living costs to pay for the experts he claimed he needed.

"If I wanted to be homeless and sack all my staff and kick my kids out of school I could've done that, yes," Dotcom said.

The hearing will continue tomorrow.