Megaupload founder Kim Dotcom will remain behind bars after a judge today rejected his appeal for bail.

Dotcom, who is awaiting an extradition hearing, was refused bail when he appeared in North Shore District Court last week. He took the stand this morning during an appeal against that decision.

The 38-year-old and four others were arrested after police raided his $30 million rented Coatesville mansion and a house in Orakei last month.

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.


Dotcom, a multimillionaire, argued that all his assets were frozen and he wanted to stay in New Zealand to fight to get his money back.

Giving his decision this evening in the High Court at Auckland, Justice Raynor Asher agreed with the earlier District Court decision.

He said there was nothing to tie Dotcom to New Zealand except his motivation to fight the charges and free his funds.

However, Justice Asher said there was a possibility that the FBI had not frozen all of the multimillionaire's funds and that would enable him to illegally leave New Zealand.

If Dotcom did make it to his home country of Germany, he would be safe from extradition to the United States to face the charges.

In declining bail last week at North Shore District Court, Judge David McNaughton said he was mindful of the scale of the alleged offending, which he described as "the biggest case of its kind ever prosecuted in the United States''.

He said he had no doubt Dotcom could flee New Zealand because he had access to forged travel documents and money and accused was a real flight risk, with passports and bank accounts in different names.

Dotcom "emphatically'' denies that he was involved in what US authorities have called a "mega conspiracy''.

Dotcom complains of advances

During his appearance today, Dotcom said he has had unwanted letters from female prisoners and a phone call from a man claiming to be a prosecutor while on remand.

Crown lawyer Anne Toohey, on behalf of the United States Government, told the High Court at Auckland this morning that a man known to have forged travel documents had also tried to visit German-born Dotcom since he has been on remand in the Auckland Central Remand Prison.

But Dotcom, who has New Zealand residency and lives here with his family, said he had not heard of the person and had no intention of fleeing to his birth country where he cannot be extradited to the US.

"I'm aware that if I go to Germany I would be unable to un-freeze my assets. What I want to do is stay here to fight and get my money back. What would I do in Germany with five kids and a wife with no money?

"It is not an option for me.''

He said a man called him at prison asking for money in return for a favourable bail hearing. Dotcom said the man claimed to be a "prosecutor'' and he had reported it to the authorities.

Dotcom told the court this morning that during the raid he was punched in the face by police in his panic room.

"And one guy was standing on my hand. It was bleeding.''

Ms Toohey said police maintained Dotcom had resisted police. She asked about a gun in an open safe in the panic room where Dotcom was arrested.

Dotcom said he had the gun loaded with a plastic round for self-defence.

However, Ms Toohey said the firearm was also loaded with shells containing buckshot.