U.S. Government Seeks to Keep Megaupload Money Because Kim Dotcom Is a 'Fugitive'

Prosecutors argue that criminal defendants who won't willingly give themselves up shouldn't be allowed to use the resources of the court.

On Tuesday, the U.S. Department of Justice told a Virginia federal judge that Kim Dotcom and cohorts have no business challenging the seizure of an estimated $67 million in assets because the Megaupload founder is evading prosecution.

The government brought criminal charges against Dotcom in early 2012, but he's been holed up in New Zealand awaiting word on whether he'll be extradited. The government got antsy and this past July, brought a civil complaint for forfeiture in rem, a maneuver to firmly establish a hold over money from bank accounts around the world, luxury cars, big televisions, watches, artwork and other property allegedly gained by Megaupload in the course of crimes.

Kim Dotcom Fights U.S. Government's Attempt to Seize $67M in Assets

Dotcom is fighting the seizures by questioning the government's basis for asserting a crime, saying "there is no such crime as secondary criminal copyright infringement," as well as challenging how the seized assets are tied to the charges against Dotcom.

But according to the U.S. government, Dotcom doesn't get the pleasure of even making the arguments. In a motion to strike, the government cites the doctrine of fugitive disentitlement, which bars a person from using the resources of the court if that person is aware of prosecution and is evading it. The U.S. government has previously leaned on the doctrine to rebut an attempt by Dotcom's lawyers to dismiss the criminal complaint.

"Though disentitlement of fugitive claimants is discretionary, rather than mandatory, courts have found that the exercise of its discretion under § 2466 is necessary to protect the integrity of the judicial system," states the U.S. government in a motion to strike.

Dotcom could "consent to surrender," adds the government, "but has instead opposed extradition."

The U.S. government also raises the issue of timing. Dotcom's extradition hearing is currently set for June 2, 2015, but "for assets located in New Zealand, at least, the restraint sought based upon the order of this Court cannot, by statute, be extended beyond April 18, 2015."

The latest papers also offer some updates about the other defendants.

Bram van der Kolk, former lead programmer at Megaupoad, Finn Batato, former chief marketing officer, and Mathias Ortmann, former chief technology officer, are also in New Zealand awaiting extradition.

More notable are Julius Bencko, a co-founder who designed Megaupload's site, and Sven Echternach, who was the head of business development at the company. Slovakia is refusing to extradite Bencko while Germany won't hand over Echternach. According to the U.S., "they do not have to fear arrest there on the charges in this court."

Ira Rothken, lawyer for Dotcom, attacks the move as gamesmanship. He responds, "The issue is the government basically is looking to use the fugitive disentitlement doctrine as procedural mechanism to avoid arguing merits of criminal action. The issue here is that since Congress never created a statute that makes secondary criminal copyright infringement, this court doesn't have subject matter jurisdiction over this case or the defendants."

Rothken also disputes that Dotcom is a fugitive, saying he's never been to the United States, so the definition doesn't fit and the doctrine shouldn't apply on those grounds either.

This article was originally published by The Hollywood Reporter.