Inside Megaupload's Megamind: Kim Dotcom's Playboy Bunnies, Russian Nuclear Vessels, And Private War On Terror

In the Wild, Wild West-era of digital media, there is no cowboy quite like Kim Dotcom. Part Sean Parker, part Kevin Mitnick, with a whiff of Notorious B.I.G., Dotcom embodies the most savage age of online piracy, having made a fortune on the edges of Internet freedom.

Dotcom, the megamind behind Megaupload, was arrested yesterday in New Zealand, his panic-room door busted down by officials, who found the hacker clinging to a sawed-off shotgun. Dotcom faces up to 55 years in prison if extradited to the U.S. and convicted on charges of racketeering, copyright infringement, and money laundering. The hacker-turned-multimillionaire businessman has been accused of costing the entertainment industry $500 million through pirated content uploaded to his popular file-sharing site, which boasted 180 million registered users and celebrity endorsements from Kanye West to Kim Kardashian.

Before Megaupload was shut down by Federal prosecutors, a statement was reportedly posted on the site calling the charges "grotesquely overblown."

Dotcom has long been a controversial and flamboyant figure. Pictures of the Megaupload founder online show him with yachts, private jets, and Playboy bunnies in exotic locations such as Monaco, Cuba, and Brazil. According to court filings, prosecutors are seeking the forfeiture of $175 million, dozens of bank accounts, as well as sports cars including Mercedes-Benzes, Rolls-Royces, and Lamborghinis (with vanity plates such as "God" and "CEO").

Long before SOPA, Dotcom saw a potential market in taking advantage of the system—and ran wild with the opportunity. How wild? Here's a look inside Dotcom's life of excess—a lifestyle afforded to a guy who's both tech savvy and unencumbered by business ethics, and who has a taste for shotguns, black Benzes, and wraparound shades.

- In 1994, 20 cops raided Dotcom's home, in what appeared to be a sting operation set up by MCI. The police confiscated $80,000 in computer equipment, arresting Dotcom and charging him with selling stolen credit cards. Dotcom claimed to be working undercover for MCI, and that he was only trying to help make the company's systems more secure.

- In 1998, Dotcom wore black sunglasses to his trial in Germany, and boasted that he loved "feeling like a spy." He was convicted of fraud and other hacking charges, including embezzling hundreds of thousands of dollars. He was sentenced to two years of probation, and fined 20,000 marks. The judge at the time said the court viewed his actions as "youthful foolishness."

- In 2001, Kim Dotcom (then known as Kim Schmitz) purchased a mountain of shares in a nearly bankrupt company called LetsBuyIt.com. He revealed to the public that he'd invest $100 million in the company. Share prices rocketed 300%, earning him $1.5 million in profit—but also landed him an insider trading conviction in Germany.

- After the 9/11 attacks, Dotcom offered a bounty of $10 million for the capture of Osama Bin Laden. He launched a group called the Young Intelligent Hackers Against Terrorism, which he said received thousands of tips. "We cannot say what's true...but we will forward it all to the FBI," he said at the time, providing one sample email tip to the Sunday Herald Sun, which said, "Try Looking in Kandahar in Afghanistan. He visits his wife and daughter there at least once a month"

Dotcom also launched a website called Kill.net to help recruit hackers for his mission of stopping terrorism. The mission guidelines: search for accounts of terror organizations, identify money transactions, financial supporters, and capture and deliver data to officials. "The domain is easy to remember," Dotcom told News Bytes of Kill.net. "The potential for misspelling it is small."

- According to The Guardian of London, Dotcom once changed former German chancellor Helmut Kohl's credit rating to zero.

- Dotcom's hacker name was or is "Kimble," a nickname that derived from Dr. Richard Kimball of The Fugitive.

- Dotcom has a love for racing cars, but after he was banned from driving for a year for speeding in 2001, he started a company called Megacar, based on his custom-built S-class Mercedes that included a wireless computer, 16 phone lines, real-time video-conferencing access, as well as a flat-screen panel that folded into the ceiling, four TVs, and a DVD player. According to The Independent, he thought the car would be attractive for heads of state and diplomats, and claimed Chrysler and GM were interested in building a model based on his prototype. Megacar, said Dotcom, was one his "kimpanies."

- After being arrested in Bangkok in a 5-star hotel, due to a request by the German embassy, Dotcom threated to kill himself online on his birthday in protest. He said on his website that "the real Kim Schmitz" is no more, and that he wants now to be called "His Royal Highness King Kimble the First, Ruler of the Kimpire." He was eventually deported from Thailand to Germany where he was detained in 2002.

- Dotcom is said to be 6 feet 7, and weigh 330 pounds, according to the L.A. Times in 2001. Though he was in hot water in Germany in the early aughts, Dotcom is said to have always cherished his reputation in the U.S., where he didn't fear arrest or prosecution.

"I get 100 e-mails a day from Americans who say, 'What you're doing is cool—can we work for you?' From Germans I also get 100 e-mails a day, saying, 'You fat pig!' or 'You're a liar and a criminal!' " Dotcom told the L.A. Times. "I'm trying to change this."

Of his standing in the U.S., he said at the time: "I don't know of any formal charges, but with all the fingerprints I left and all the coverage of my trial here, I suspect there is something pending."

- When Dotcom fled Germany in 2002, he released a message on his website entitled "Bye-Bye, Deutschland," in which he said his "German high-tech fairy tale" had come to an end, and that he's leaving out of fear of criminals threatening his life. He ended the message by saying, "Legends may sleep, but they never die," apparently quoting The Sandlot. "Next week starts here the KimPire."

- Dotcom has said his convictions in Germany were cleared up through the country's "cleanslate" law, news network TV3 has reported. "Officially, I am as clean as it gets," Dotcom said.

- In 2002, Dotcom sought to charter a former Russian Navy nuclear-powered ice-breaker to take a group of his friends on a cruise of the North Pole, according to the Sydney Morning Herald. Dotcom also sought an "igloo village for icebound partying and dog races." The charter never came to fruition because of Dotcom's business "irregularities."

- In 2003, Dotcom appeared in an episode of MTV Asia's Whatever Things, a sort of foreign version of Jackass, where he interrupted a yoga class by yelling "happy birthday" over a megaphone.

- In 2005, Dotcom showed up in a Vanity Fair profile of the Gumball 3000, a high-speed sports car race out of Paris. He's noted as a "very skilled and fast driver," and a "highly competitive venture capitalist." He reportedly made a bet with two female drivers that he'd win the Gumball: "He'll give them each a half a million pounds if they beat him, but if he wins, he gets a threesome."

During the race, his sports car hit 155 M.P.H.. When 10 cops were waiting at a tollbooth to stop him, Dotcom zoomed by in the service road, refusing to stop. "I decided to get here first and nothing would stop me," Dotcom told Vanity Fair. "I'm very glad that I can sit here tonight, enjoy the party, have the glory and the fame of being the fastest Gumballer again...We go out for a battle together, and the battle is being six days on the road and trying to kick ass with all these supercars, which are kind of our weapons...And some know how to shoot really well and some don't, and at the end of the day everybody who arrives here in Cannes or any checkpoint deserves total respect."

- In 2005, Dotcom decided to launch The Ultimate Rally, a 3,000-mile race billed as the "first exotic-car transcontinental race of its kind." With a $2 million grand prize, the race was slated for the summer of 2006, and would include 100 cars racing over five days, followed by a two-day party.

- Last year, Dotcom tried to buy one of New Zealand's most expensive homes, a $25 million property in north-west Auckland, but ministers denied the request because he didn't meet "good character" requirements. He decided to rent the property instead, according to the Deutsche Presse-Agentur. And after he invested $8 million in New Zealand government bonds—and made a donation to the Christchurch earthquake fund—his application for residency was approved.

- Dotcom has claimed to be worth more than $200 million, and is said live "largely behind the walls of the mansion surrounded by bodyguards," according to the Deutsche Presse-Agentur.

- Dotcom put $500,000 into a fireworks display for Auckland's New Year's Eve celebration. According to an associate, "He just loves fireworks," the New Zealand Herald reported.

- Dotcom had plans to buy the most exclusive properties in New Zealand and create a sort of high-end version of Airbnb: a network of expensive rentals for VIP travelers. He also once had ambitions to start "Kim's Lifestyle Club" and "Kim's Lifestyle Shop," though it's unclear whether his plans ever materialized.

Add New Comment

11 Comments

  • james

    Your article states "
     New Zealand, his panic-room door busted down by officials, who found the hacker clinging to a sawed-off shotgun. "

    In fact the gun was locked in a gun safe, he was not touching it ! 
    Where does fast company get this sort of misinformation from ?

  • Casaubon

    Good point about Dropbox. Add gmail to the mix, I've known a lot of people *cough* that have stored mp3s on their gmail accounts.

  • Tyler Gray

    Look back again at our first story. http://bit.ly/y71CeV. It was loaded with numbers that helped put this in the proper business/innovation context. Look to your top right. See that piece on Darrel Issa ("Beyond SOPA")? That's back up there for a reason. And you'll find a deep silo of SOPA/PIPA reporting and discussion here http://bit.ly/yH3Cq7

    The most important -- and yes, fun as hell -- reporting to be done in the moments after Megaupload's shutdown involves exposing the kind of character that thrives in the wild west era of digital media. It's the same reason Shawn Fanning and Sean Parker were important figures in the first era of file sharing. Sorry, but no speculation or opinion about what this may or may not mean for copyright law is more powerful than a developing portrait of a man who ran roughshod all over it to make a fortune. It speaks to the kind of businesspeople (and the nefarious side of innovation) behind the piracy economy and just how much there was to be made, not only by Kim Dotcom but by those getting a piece of his river of money. As Austin wrote, he's the embodiment of the unbridled piracy era. As his case proceeds, and we find out more about how the feds are building it, there will possibly be more to write. Ars Technica's story on the people who lost access to legit files on Megaupload was a nice piece of this story, too, though. Thanks for reading. Much more to come.

  • Eric Rice

    My comments apply to that first story just as strongly as to this one. Take this bit from it:

    "boasting vanity license plates that likely reflect the Dotcom era of Megaupload: "Good," "Evil," "CEO," "God," "Stoned," "Mafia," "Hacker," and perhaps most telling, "Guilty.""

    ... that's clearly an indictment of him on his personality alone, and the story contains no information to speak of regarding the federal indictment, the actual charges against him, or the practices of the company - just some numbers on revenues and more spectacular stories about a weird guy.

    Content rights holders must love this kind of reporting, because it focuses on eccentric characters and "bad guys" that make for good emotional cases against the evil scourge of pirates. Dotcom and his personality make for a great strawman they can burn in the halls of congress while trying to get more draconian copyright legislation passed and chip away at the rights of content users. Comparisons to Dotcom and Mega Conspiracy will make for great ad hom attacks on otherwise legitimate users, and detract from rational discourse about the real issues of fair use and the role that service providers play in the digital marketplace. See what happened on Wednesday, where the big content response to the online SOPA protest was to attack Wikipedia and Google for "abusing their power" in the marketplace, rather than substantively responding to the concerns being raised about the legislation.  In this case, I worry that the focus on Dotcom's personality will have the same effect of diverting attention from the substantive issues of the government takedown and coming prosecution. Mind you, the feds just tore apart a large business on ALLEGATIONS of copyright infringement, and there has not yet been any due process for Mega Conspiracy ... I think THAT'S the most important thing anyone can report on. 

    "Sorry, but no speculation or opinion about what this may or may not mean for copyright law is more powerful than a developing portrait of a man who ran roughshod all over it to make a fortune."

    Don't you see ... with this statement you've indicted this man on character alone, with no rational discourse on what he's ACTUALLY done or the charges being levied against him. 

     

  • Tyler Gray

    ... When you take it out of context, it sounds more that way, yes. But then you're ignoring all sorts of language and attempts to represent the other side, despite the fact that Dotcom does plenty to indict himself. 

    Regarding that first story, you say, "...The story contains no information to speak of regarding the federal indictment, the actual charges against him, or the practices of the company." The link in the first sentence is to the New York Times story on the indictment. Almost every sentence in the top of the story refers to "court documents" or the indictment itself and goes on to define, first, the sources of income to the site, with dollar amounts, that were not said to be tied directly to copyright infringement. Most of the story is spent addressing the context surrounding Megaupload and Kim Dotcom.

    Then comes this paragraph: 

    "The indictment charges come not just as SOPA is a hotly debated topic in Washington, but as Megaupload attemped to make the shift toward becoming a more legitimate operation. Last month, the site received a makeover that included celebrity endorsements from Kim Kardashian, Kanye West, and Will.i.Am; Swizz Beatz was even appointed CEO (though the hip-hop artist was not named in the indictment)."

    In fact, there's only two real paragraphs that deal with his character, based on videos he himself made or starred in, or words he himself wrote. Now, you: "Content rights holders must love this kind of reporting, because it focuses on eccentric characters and 'bad guys' that make for good emotional cases against the evil scourge of pirates."
    Is piracy not a scourge? Kim Dotcom aside, are people who intentionally take the art/words/pictures created by others and sell or distribute them without permission not just thieves? I'm curious who you think these content creators are--the majority of them are not the artists you know, they're struggling to eke out a living. You don't hear about their IP being stolen because they can't afford to make a case of it, much less a public case of it. I suspect you associate "content creators" with the entertainment dinosaurs that have failed to innovate and keep up with digital users' demands. They might have most of the money, but they're not the majority. This is the real problem with SOPA and its reaction, it has divided people into two equally obtuse camps. And it's not that clear cut. I'm guessing we agree that it was overreaching, ignorant at best, and nefarious at worst (it took me finally reading the law instead of the coverage of it to arrive at this). It was a power grab by an industry that's withering, most likely. But to pin SOPA on "content creators" as a whole or try and suggest that curbing piracy--digital and otherwise--is going to kill the internet is just as obtuse as SOPA itself. This is far too nuanced an issue to make such broad presumptions. You make great points about how the feds and government could (and likely will) use this case to potentially stifle bona fide, legitimate digital innovation that doesn't involve taking someone else's intellectual property and giving it away or selling it without permission. But you're ignoring the other side, that it's too easy for someone build a mega business on stolen IP. Evidence (including his own emails) suggests that was a large part of Dotcom's business. But due process will decide for sure.  Innocent or guilty, though, his public persona of excess was enabled by a lack of regulation on how digital content is licensed and distributed. Even taking out of the equation the way he made his millions, is this really the kind of guy you want to champion? 

  • Eric Rice

    While the articles here about Dotcom's eccentric personality are fun to read about, there are a number of potential legal and social issues wrapped up in this action that could set a serious precedent for FastCo readers who might be in the business of starting businesses (do you think there are a few?). I'm a little disappointed that there's so much drama, and so little real analysis going on here. 

    Does his personality really indict him for providing a service to users that was used for both legal and illegal distribution of content? Should he be held responsible for providing a service that users abused? Does his knowledge of those infringing uses make him guilty of a crime, or at least complicit in crime? Hell, is copyright infringement really appropriately treated as a criminal offense (as opposed to civil)? A lot of these issues are core to the SOPA/PIPA debate, too, and are probably of great interest to your readers ... how about some more rational and analytical coverage, rather than this left-handed "he's a weird guy, so he must be guilty!" What does this mean for Dropbox, for instance?

    Arstechnica is doing a good job of exploring the consequences of the government's actions, and given their track record, will probably provide some responsible and deep analysis in the coming days and weeks:

    http://arstechnica.com/gadgets...