Raid, seizure deemed illegal

New Zealand High Court judge Helen Winkelmann found on Thursday that search warrants used when 70 police raided Dotcom's rented mansion at Coatsville just north of Auckland in January did not "adequately describe the alleged offenses."

"They are general warrants, and as such, are invalid," she said, adding that the raid amounted to trespassing by police. "The police relied on invalid warrants when they searched the properties and seized various items; the search and seizure was therefore illegal."

Dotcom, also known as Kim Schmitz, is on bail fighting attempts by US authorities to have him extradited from New Zealand to face charges of conspiracy to commit copyright infringements and money laundering.

His website, megaupload.com was popular - until its closure on the orders of a US District Court in January - and peaked at four percent of worldwide Internet traffic

Data transfer to FBI 'unlawful'

Judge Winkelmann also ruled that New Zealand authorities had acted unlawfully in allowing the transfer of digital copies of Dotcom's hard drives to the FBI.

Last month, Dotcom's lawyer, Willy Akel, told the court that two FBI analysts flew to Auckland in March, cloned computer data, and sent it to the US via courier, despite police knowledge that a lower court was undecided on the legality of such an action, according to the New Zealand Herald.

An Auckland district court had planned to hear the case in early April, but by that time two packages of cloned data had already left the country.

On Thursday, Winkelmann said material, whether relevant or irrelevant to the case, had not been sorted as required by law, making the seizures of January invalid.

She ordered that only items deemed relevant by a court-appointed lawyer be released to US authorities and said everything else should be returned to Dotcom "forthwith."

Case continues in US

Dotcom and three co-accused executives, who were also arrested in the raid, have denied any wrongdoing. They face potential jail terms of up to 20 years.

In early June, US lawyers for the Megaupload website said the piracy charge was flawed because the company was based in Hong Kong, and that no formal charge documents were ever served on it.

The US District Court in Virginia is due to hear submissions on Friday.

USauthorities say that from 2005 Megaupload and related sites cheated copyright holders out of more than 400 million euro ($500 million) by giving access to movies, television shows and other content without permission.

Dotcom's lawyers say his firm simply offered storage.

ipj/ncy, ipj (Reuters, AP, AFP)