The founder of Megaupload has been held in custody in New Zealand as he denies charges of internet piracy and money laundering. He said the authorities were trying to make him look as bad as possible.

Anne Toohey, the prosecutor said that Kim Dotcom, a German national, who is also known as Kim Schmitz was a ‘flight risk at the extreme end of the scale', due to owning multiple identities and a history of fleeing from criminal charges.

She said “The FBI believes the sums located are unlikely to represent all the overseas bank accounts owned by Mr Dotcom.”

Defense lawyer Paul Davidson, said “He is not the sort of person who will pass unnoticed through our customs and immigration lines and controls.”. Kim is 6 ft 6 inches tall and weighs more than 130kg.

The bail application is complex, and judge David McNaughton said he would issue a written decision no later than Wednesday. “Given the breadth of issues covered in this bail application and the seriousness of the issues, I am going to reserve my decision.”

The U.S. Authorities want Kim extradited as he made over $175 million in a few years by copying and distributing music and movies and other copyrighted content without approval. Megaupload's lawyer said that they have simple offered online storage for other users.

This case has caused other file sharing sites to look at their own business model, with sites such as FileSonic stopping their file sharing activities. They said on their home page “All sharing functionality of FileSonic is now disabled. Our service can only be used to upload and retrieve files that you have uploaded personally.”

Kim Dotcom was arrested with three other people after police raided his country home at the request of the U.S. Federal Bureau of Investigation. Police had to cut him out of a safe room which he locked himself in. He was apparently frightened and wanted to protect himself. Authorities found three passports and 45 credit cards under various names. The lawyer said “My client collects them (credit cards), most of them are out of date.”

Kim Dotcom has been living in luxury, recently ordering another $3.2 million of renovations to his mansion which he leased near Auckland.

Reuters add “The case is being heard as the debate over online piracy reaches fever pitch in Washington, where Congress is trying to craft tougher legislation.

Lawmakers stopped anti-piracy legislation on Friday, postponing a critical vote in a victory for Internet companies that staged a mass online protest against the fast-moving bills.

The movie and music industries want Congress to crack down on Internet piracy and content theft, but major Internet companies such as Google and Facebook have complained that current drafts of the legislation would lead to censorship.

Critics of the U.S. Stop Online Piracy Act, or SOPA, and Protect IP Act (PIPA), quickly showed their opposition to the shutdown of Megaupload.com, with hackers attacking the public websites of the Justice Department, the world's largest music company Universal Music, and the two big trade groups that represent the music and film industries.

Dotcom's New Zealand lawyer Davison said in court that Megaupload's business was being misrepresented and authorities were being aggressive to add drama to the case.”

Kitguru says: Will he get off the charges? The American authorities are pushing this hard.

Become a Patron!