Megaupload's Dotcom free until extradition hearing

AUCKLAND, New Zealand -- Kim Dotcom, founder of the Megaupload file-sharing websites that U.S. prosecutors charge amounted to a global copyright piracy operation, left a New Zealand jail today after a court ordered his release.

A district court judge ruled at a hearing that Dotcom, a German formerly known as Kim Schmitz, was not a flight risk and could be released without posting bond to rejoin his pregnant wife and three children at a home he owns near the rented multimillion-dollar mansion that authorities seized Jan. 20.

The judge placed restrictions on Dotcom's activities: He is not to use the Internet, he is not to travel more than 50 miles from his home without police permission, the property must be electronically monitored, and no helicopter is to land on the property at Coatesville, north of Auckland.

Dotcom, 38, has been charged in federal court in Virginia with racketeering, money laundering, copyright infringement and wire fraud in a recently updated conspiracy indictment that names him, Megaupload, and six associates.

New Zealand authorities seized millions of dollars in investments and assets, including a fleet of high-priced cars, art and other valuables, along with the estate, in a raid based on the U.S. indictments.

The U.S. Justice Department, which contends Megaupload provided millions of illegal downloads that deprived creators of movies and music hundreds of millions of dollars in revenue, is seeking to extradite Dotcom to stand trial in the United States.

The judge, Nevin Dawson, granted an exception to the restrictions on Dotcom's movements for a medical emergency. His wife is due to give birth to twins March 28.

Dotcom, who also holds Finnish citizenship and has a residence in Hong Kong, where Megaupload was based, founded Megaupload seven years ago and lived a flamboyant lifestyle, which he promoted through online pictures and videos of himself with models on yachts and jet airplanes.

Six colleagues charged with him are already out of jail on bail. All were in the courtroom when Dotcom made an appearance.

The judge dismissed concerns about Dotcom's credit cards, aliases and prior convictions in Germany on hacking and fraud charges. He agreed with defense lawyers who argued that since Dotcom's assets had been seized and finances frozen, he lacked resources to flee the country.