Mathias Ortmann and Bram van der Kolk, who used to work for Megaupload, were found guilty last week in the New Zealand High Court. They had signed a deal to avoid getting handover to the U.S. In theory, they could spend up to 10 years in prison. Today, we’ll look at the specific charges and what they could mean for the two businessmen.
Ten years is a long time for anyone, so when Mathias Ortmann and Bram van der Kolk, who used to work for Megaupload, saw the light at the end of the tunnel, they took it.
They fought for detainment in the U.S. for over a decade. They recently agreed to all the charges and sentences in New Zealand instead.
Not having to fight a criminal case in the U.S. for years is a big advantage. This could have led to a decade or two in prison. That’s a victory in and of itself. Still, Ortmann and van der Kolk had spent between a quarter and a fifth of their lives in legal limbo and had had enough.
Since the U.S. and New Zealand governments held most of the cards, the men would have taken a lot of high-stakes risks if they had kept fighting. The odds of winning get lower with each roll. The costs are almost certain to go through the roof no matter what. Limiting the damage as early as possible will allow them to move on.
The two former Megaupload employees pleaded guilty last week, and a New Zealand’s High Court judge found them guilty. They are now waiting for their sentence. The crimes they said they did in New Zealand should be the same as those in the U.S. In reality, their crimes are more severe than they presented. The maximum sentences for the crimes listed in the U.S. superseding federal prosecution from January 16, 2012, are nothing like what they say.
Piracy was the main aim of Megaupload
The charging document against Ortmann and van der Kolk says that Megaupload was created, and designed, for piracy. Together with Kim Dotcom, the three allegedly saw how much money Rapidshare was making from massive copyright violations. They decided to do the same.
The ‘organized criminal group’ behind Megaupload was to encourage the uploading of highly popular files knowing they were “overwhelmingly” infringing. They wanted to host and distribute those files and disguise the volume of infringing content on the site. Another objective, according to the document, was to frustrate the efforts of copyright holders who wanted their content removed.
The “organized criminal group” that ran Megaupload wanted to get people to upload viral files. They preferred “largely” illegal, host, and distribute those files. They also wanted to hide how much illegal content was on the site. Another goal of theirs was to make it hard for the copyright owners to take legal actions against them.
Megaupload made money from advertising because the content that broke copyright laws was so popular. Users were also encouraged to buy paid subscriptions because of the pirated content.
Ortmann and van der Kolk both agreed that the illegal content on Megaupload was the site’s leading source of traffic and income. Also the reason for its popularity. And they knew widespread copying hurt the people who owned the rights to these contents.
Participation in an Organized Criminal Group
Ortmann and van der Kolk were guilty of four charges. The first and second charges are for breaking sections 98A and 7A of the Crimes Act 1961.
Section 98A of the Crimes Act of 1961 says that joining an organized criminal group is a crime that could lead to jail time.
Under this law, an organized criminal group is a group of three or more people whose aim is to get money by “committing offenses.” This offense can get them a four-year prison sentence in this area. The same rule applies if someone gets benefits outside of New Zealand. They will face a four-year sentence in New Zealand.
Section 7A of the Crimes Act of 1961 is about crimes outside New Zealand, but they can still face punishment here. The law focuses on terrorist acts and covers crimes against Section 98A.
The first charge is for breaking the laws 98A and 7A, which can get you up to five years in prison. The second charge is the same as the first, but the maximum sentence is ten years. This section means that some of the crimes took place when the most time you could get for being in a criminal group was five years. After New Zealand raised the maximum sentence to ten years to discourage organized and gang crime, the remainder number of crimes occurred.
Trying to cause a loss by lying.
The third charge is for breaking section 240(1)(d) and section 310 of the Crimes Act 1961.
Section 240(1)(d) says that a person who is found guilty of securing by manipulation or any deception and without a claim of right “causes loss to any other person.” Section 310 says that if someone is found guilty of working with someone else to commit a crime, they could go to jail for up to seven years.
In the charging document, Ortmann, van der Kolk, and Kim Dotcom are accused of lying in several ways. They include telling NBC Universal that infringing videos couldn’t be hosted on sister site Megavideo. They also claimed that the USTR that Megaupload had a rule against repeat copyright violations. According to them, they fired 120,000 repeat offenders and deleted illegal content worldwide, not just in the United States.
According to PayPal, they told them that illegal contents weren’t on the site anymore and they blocked the uploaders. Still, the document says that “only a few” uploaders faced any punishment.
Trying to Get Documents Without Being Honest
The last charge is for breaking sections 228 and 310 of the Crimes Act of 1961. As we’ve already said, section 310 is about a plot, while section 228(1)(a) is much more unusual.
“Every one is liable to imprisonment for a term not exceeding 7 years who, with intent to obtain any property, service, pecuniary advantage, or valuable consideration, dishonestly and without claim of right, takes or obtains any document,” it reads.
When writing this article, New Zealand courts are most likely to give out sentences that are both short and long. This rule means there are different sentences for each crime. They will serve all the sentences at the same time.
Since the longest sentence for any of the above crimes is ten years, it’s unlikely that Ortmann and van der Kolk will get a longer sentence.
They admitted their guilt as soon as accusations were brought up against them in New Zealand, which could cut their sentences by 25%. Since neither is a violent offender, they might be able to get out after just a third of their time.
The judge tries to hold the men accountable. However, they have shown for over a decade that they can be good citizens who contribute to New Zealand. So a short sentence isn’t totally out of the question.
Kim Dotcom thinks they might only get two years of home detention. Although charges are still up for discussion and three won’t be any deals regarding the sentences.
Last, it’s essential to know violations and their applicable charges. Since the 2012 raid of Megaupload, Kim Dotcom has been warning that if he goes to prison for hosting someone else’s illegal content on Megaupload, it could be bad for all service providers in New Zealand because there would be no “protected status” for services under copyright law.
Copyright violations may be at the heart of the above charges, whether on purpose or not, but they don’t seem to threaten the way things are. They have nothing to do with how Megaupload works technically. Instead, they based these on what the three discussed in private about copyright violations and the lack of actions against them.