Kim Dotcom, founder of the infamous file sharing site Megaupload, was denied bail by Judge David McNaughton.  The judge cited that Dotcom is a flight risk and there is a possibility that if the bail was granted, he will flee to another country, making it difficult to extradite him.

According to Dotcom’s lawyer, Paul Davison, an appeal has been filed to overturn the court’s ruling regarding the bail.

Dotcom, along with three others, are charged for engaging in a racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering, and two substantive counts of criminal copyright infringement.  If convicted, they will be facing the maximum penalty of 20 years for conspiracy to commit racketeering and to commit money laundering, five years for each count of copyright infringement, and five years for conspiracy to commit copyright infringement.

A U.S. Justice Department official, who refused to be named since the case is still pending, said that Dutch authorities arrested a fifth suspect, software programmer Andrus Nomm, citizen of Estonia and resident of both Turkey and Estonia.

Clean Slate

Dotcom plead “not guilty” to charges filed against him and coincidentally, on the day he was denied bail, an e-mail claiming that he turned a new leaf surfaced. Dotcom’s e-mail were sent to his New Zealand neighbors, telling them that he was once a hacker, and “a criminal neighbor like me” could help them with insider stock tips and tax fraud.  But the tone of the e-mail turned serious:

“Fifteen years ago I was a hacker and 10 years ago I was convicted for insider trading,” Dotcom wrote. “Hardly the kind of crimes you need to start a witch hunt for. Since then I have been a good boy, my criminal records have been cleared, and I created a successful Internet company that employs 100+ people.”

Now, the New Zealand government is being questioned as to why Dotcom was granted residence in their country despite prior criminal convictions.  New Zealand Prime Minister John Key stated that Dotcom disclosed his convictions in his immigration application, but because enough time had elapsed he was given a clean slate.  Key also acknowledged the fact that it seemed inconsistent that the test for buying land would be higher than the test for residency.

“What I’ve asked my officials to do, is to go away and have a look, because there’s clearly a potential anomoly there,” Key told reporters Wednesday.