Internet multimillionaire Kim Dotcom has already launched an appeal against a decision to decline bail while he awaits an extradition hearing.

The German businessman, the co-founder of the Megaupload website and a New Zealand resident, appeared in court today to hear the decision on whether he would be granted bail following his arrest, along with three other people, last Friday.

The four were arrested after a police raid at Dotcom's $30 million rented Coatesville mansion on Friday morning.

The FBI is seeking to extradite them to the US to face charges of conspiring to commit racketeering, conspiring to commit money laundering, copyright infringement, and aiding and abetting copyright infringement.


Judge David McNaughton delivered his decision at North Shore District Court in front of a packed public gallery.

The judge said he was mindful of the scale of the alleged offending - "the biggest case of its kind ever prosecuted in the United States''.

He said he had no doubt that Dotcom, 38, could flee New Zealand if he wanted to because he had access to forged travel documents and money.

"The real question though on the bail application is whether there is any incentive to flee the jurisdiction.''

Judge McNaughton said if Dotcom was able to flee to Germany, he would be safe from extradition because it did not have an extradition agreement with the US.

He said Dotcom was a real flight risk, with passports and bank accounts in different names.

Dotcom was remanded in custody until February 22, when extradition papers were expected to be filed.

Dotcom "emphatically'' denies that he was involved what has been called a "mega conspiracy''


Dotcom's alleged co-offenders, Bram van der Kolk, 29, Finn Batato, 38, and Mathias Ortmann, 40, had their hearings adjourned until tomorrow.

"My decision on Mr Dotcom will probably determine which way it goes for their applications,'' said Judge McNaughton. "It's still an open question in my mind - I still haven't resolved the issue.''

Speaking outside court today, Dotcom's lawyer, Paul Davison QC, said his client was disappointed at the decision and there was no evidence he had any kind of criminal association.

Mr Davison said Dotcom had no intention of leaving New Zealand and, with his assets now frozen, he did not even have the means to leave.

He said the judge agreed with many of the arguments the defence made in its bail application, but they disagreed on the flight risk Dotcom posed.

An appeal has already been lodged at the High Court.


At a hearing on Monday, Mr Davison told the court his client denied any "criminal misconduct of wrongdoing''.

"He denies the existence of any mega conspiracy ... or that he was involved in any criminal enterprise relating to infringing copyrighted works.''

Crown lawyers acting on behalf of the US Government had opposed bail, saying Dotcom was an "extreme'' flight risk and there was a significant chance he would reoffend while on bail by re-establishing the website.

Crown prosecutor Anne Toohey said Dotcom had access to multiple passports, and in the past had used his fortune to charter private helicopters, jets, and yachts.

Mr Davison argued his client was not a flight risk because all his accounts had been frozen, bar one at Rabobank with a balance of about $300,000. He held four passports, two of which were seized by police from beside a bed. They also seized three wallets with 16, 19 and 10 credit cards in each. Mr Davison said most of the cards were out of date.

He said Dotcom had no way of re-establishing Megaupload, so the risk of reoffending was nil. "The business has been shut down ... there is no ability to start this business up on a computer anywhere. Mr Dotcom can assure the court that he has no intention of re-establishing the business. If there is an ability to do anything of that nature, he is not going to do it until the legalities of the issue are resolved.''