US drops extradition against Megaupload defendant

From left: Bram Van der Kolk, Kim Dotcom, Mathias Ortmann and Finn Batato outside the Auckland...
From left: Bram Van der Kolk, Kim Dotcom, Mathias Ortmann and Finn Batato outside the Auckland High Court in 2012. Photo: NZ Herald (file)
The Megaupload Four is now the Megaupload Three - the United States has dropped its extradition case against one of the defendants who has a "life-threatening" medical condition.

Megaupload's former marketing manager Finn Batato is no longer among those sought on a string of charges in the US copyright-related case.

It comes as the tenth anniversary of the January 2012 arrest of the Megaupload Four approaches without an extradition date set.

Reaching that point will take years more argument through court, even if Minister of Justice Kris Faafoi walks through the door opened by the Supreme Court last year and signs the extradition order.

That is now the next step with the Court of Appeal judgment resolving a slew of outstanding issues that had been a technical bar to the Supreme Court's finding last year that the extradition request had been properly made.

It is expected if he does sign the extradition order, his decision to do so would be subject to judicial review at the High Court. Any outcome would likely be appealed by either side, as almost every decision has been.

The quiet dropping of the extradition of Batato was signalled in a single line of the latest Court of Appeal judgment. It recounted the charges and desired extradition of Kim Dotcom, Bram van der Kolk and Mathias Ortmann.

It then said: "Until very recently, it was also seeking the extradition of Mr Batato but due to health issues no longer does so."

A footnote on the court order said that Batato was "formally discharged" by the District Court - where the extradition case was originally lodged - on June 10 this year.

Batato declined to make public comment at this stage about the illness when contacted. The Herald understands the condition to be "life-threatening".

The Court of Appeal judgment was otherwise a slate of bad news for the remaining three contesting the extradition.

It ruled against van der Kolk and Ortmann being allowed to introduce additional evidence, refused to enforce Privacy Act requests filed by Dotcom in search of new evidence and found there were no matters raised in earlier judicial reviews that had not been considered.

The Court of Appeal's judgment said the new evidence van der Kolk and Ortmann sought to introduce came from a retired US judge and a US lawyer.

"The affidavits seek to cast doubt on the strength of the United States' case," said the judgment, summarising the evidence as showing a US legal perspective on forfeiture of assets, the charges faced and "safe harbour" rules for internet service providers.

The evidence also sought to show how some evidence gathered by the US to support extradition actually supported the position of those facing extradition.

Van der Kolk and Ortmann argued the evidence was new "because up until now they have been prevented from obtaining such evidence due to lack of funding caused by the United States". The Court of Appeal disagreed, saying a Harvard law professor had made similar arguments when the case was heard at the district court.

Also, it said, many of the arguments made were those which should be heard at the trial in the US. In contrast, it was the role of New Zealand courts to find if there was enough evidence to warrant a trial in the US and not to explore or rule on deeper issues in the case.

The judgment means the case has completed its long, sometimes circular, parade through New Zealand courts.

It is a journey that began with a hearing on January 20, 2012, the day of the FBI-inspired police raid on the mansion Dotcom had rented in Coatesville.

Within a month, the US case suffered its first pratfall with the Crown ordered to underwrite any losses should the case against Dotcom fail. It was ordered to do so because the assets seized during the raid should not have been taken without advance notice.

Then a legal review of the search warrants at the High Court saw questions raised as to why Dotcom and his fellow keyboard commandos needed to be arrested through a dawn raid that saw New Zealand's anti-terrorist squad assault the mansion by helicopter.

Even worse for New Zealand's contribution to the world-wide Megaupload operation was the emergence of the Government Communications Security Bureau, the formerly ultra-secretive electronic spy agency. It was found to have illegally spied on Dotcom and van der Kolk, who were protected from intrusion as New Zealand residents.

It took three years for the actual extradition hearing to reach the District Court, and then years more for it to land with the Supreme Court in mid-2019. That decision took 18 months to deliver, with the fish hooks now resolved in the Court of Appeal.

Through it all, Batato was the quietest of defendants. He had not the means others did to hire a lawyer, instead arguing his own case or coat-tailing on legal arguments made by others.

Batato had been close friends with Dotcom since teenage years. Unlike the others, Batato held no shares in the Megaupload and related sites. He joined in 2007, leaving a role as managing director of the German office of Europe's largest independent advertising sales house.

Records show he was paid $630,000 in 2010 - the year in which the website surged and money poured in. That money was seized just over a year later during the raids then paid out piecemeal under strict controls to cover legal bills and living expenses.

Where Dotcom was socially awkward in his youth, Batato had always been outgoing and charming. It was this Dotcom emphasised in a 2013 interview: "He has the best social skills. He's really good at his job when it comes to relationship management with advertisers and going out to the fairs, making a lot of friends and really competent socially."

In an interview in 2015, Batato said his seized funds would be gone in months. It left Batato seeking fulltime work - which he has been in since - while Dotcom drew on a deeper reservoir of strictly controlled seized funds from Hong Kong. Van der Kolk and Ortmann, meanwhile, have taken the Mega business launched in January 2013 to international success with 210 million users.

In that 2015 interview, Batato said the case was taking an unrelenting toll. "The constant pressure over your head - not knowing what is there to come, is very hard, very tough. I wish there would be a button where you can just press it and the case goes away for a couple of days. It doesn't matter how fun and nice the times are, it is always still lingering above you."

The Megaupload Four had always maintained their innocence. "I would never have done anything, ever, semi-criminal or anything that would result in any legal difficulties for me," said Batato.

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