Wrong Paperwork Used to Seize Megaupload Property, Judge Says

An order granted to law enforcement allowing them to seize luxury cars and other personal effects from the estate of Megaupload founder Kim Dotcom is invalid, a judge in New Zealand ruled on Friday.

A police commissioner applied for the wrong type of seizure order, requested by the U.S., which now is “null and void and has no legal effect,” Judge Judith Potter ruled.

The ruling means Dotcom has a chance to recover some of the items, which reportedly included a Rolls Royce and a pink Cadillac, seized during his Jan. 20 arrest at his mansion outside Auckland. It was unclear on Monday the next step Dotcom would have to take to get his property returned, and his attorneys could not immediately be reached.

Dotcom, 38, faces extradition to the U.S. on various copyright infringement and money laundering charges relating to his website Megaupload, a file-sharing and storage website, which was shutdown in January.

New Zealand police applied for a second order to seize more of Dotcom’s property and, after realizing the mistake, tried to include the property improperly seized under the first order, Potter wrote.

Dotcom’s attorneys argued that some or all of their client’s property should be released. But representatives acting for the U.S. said the subsequent seizure order, dated Feb. 1, is sufficient for holding Dotcom’s property.

Extradition proceedings for Dotcom, who is free on bail but subject to electronic monitoring, are expected to begin in August.

The U.S. Department of Justice alleges Megaupload collected US$175 million in criminal proceeds, rewarding users for uploading and sharing content without the permission of copyright holders.

Also charged are Megaupload defendants Finn Batato, Julius Bencko, Sven Echternach, Mathias Ortmann, Andrus Nomm and Bram Van Der Kolk.

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