Under-fire cyber tycoon Kim Dotcom hits back at American prosecutors

Helicopters buzzed overhead and armed men in uniform abseiled down the walls of an opulent mansion in the countryside outside Auckland today. But this time the “police raid” was just a stunt to herald Kim Dotcom’s launch of a new file-sharing website, to replace the one closed down by US authorities exactly a year ago.

Mr Dotcom – born Kim Schmitz – is on bail and fighting extradition to the US over charges that his Megaupload website facilitated the illegal sharing of copyrighted films, TV shows and music. But the cyber tycoon, who moved to New Zealand from Hong Kong in 2010, denies thumbing his nose at prosecutors and Hollywood by creating a new file-sharing service, called Mega.

“Mega is going to be huge and nothing will stop Mega,” the flamboyant German declared yesterday, shortly before a lavish launch party in the sprawling grounds of his rented NZ$30m (£15.8m) home.

The 39-year-old claimed the new site – which, like Megaupload, enables users to store and share large files – was legally watertight. Sophisticated encryption software ensures files are accessible only to people who upload them, and who can decide with whom to share them. On Megaupload, users could search for files. On Mega, since the content is hidden from site administrators, they bear no responsibility for it, or so Mr Dotcom argues.

Others may disagree, but that did not dampen Mr Doctom’s spirits. Mega, he told 200 party guests, had half a million registered users within hours of starting up. In fact, he said, traffic was so heavy that the site slowed to a virtual standstill, frustrating many would-be users.

The mood at Dotcom Mansion was very different a year ago, when the master of the house was rudely awakened by the dawn arrival of scores of New Zealand police and special forces officers in helicopters and vans. They found him cowering in a “panic room”, near a safe containing a shotgun.

The officers, armed with automatic weapons and acting on a request from the FBI, confiscated millions of dollars worth of cars, including a Lamborghini LM002, a 1957 El Dorado, a Rolls-Royce Phantom Drophead Coupe, a pink Series 62 Cadillac convertible and 15 Mercedes. They also took away Harley Davidson motorbikes, jetskis, artworks and eight flat-screen TVs.

In what has been called the world’s biggest online piracy case, US authorities allege Mr Dotcom earned more than US$175m (£110m) from advertising on Megaupload and from the site’s premium paid service. Charged with money laundering, racketeering and copyright theft, he could be jailed for up to 55 years if convicted. His extradition hearing is set down for August.

The convicted hacker turned internet mogul – who has compared himself, variously, with Bill Gates, Julian Assange and Martin Luther King – denies the charges.

Mr Dotcom, whose home features a heated, spring water lap pool with underwater speakers, reportedly spent NZ$1m on a New Year’s Eve fireworks display which he watched from a helicopter.

Despite his taste for grand gestures, Hollywood studios are unimpressed by his latest venture. “We’ll reserve final judgement until we have a chance to take a closer look, but given Kim Dotcom’s history … count us as sceptical,” the Motion Picture Assocation of America said in a statement.