Megaupload's Dotcom Denied Bail

The founder of website Megaupload.com, Kim Dotcom, will remain in jail as he awaits extradition to the U.S. after a New Zealand judge declined his bail application. Judge David McNaughton declined the application citing the risk Mr. Dotcom would flee jurisdiction and the possibility that if he reached Germany he wouldn't be extradited to face the charges.

Megaupload's Dotcom Denied Bail The founder of website Megaupload.com, Kim Dotcom, will remain in jail as he awaits extradition to the U.S. after a New Zealand judge declined his bail application.

Judge David McNaughton declined the application citing the risk Mr. Dotcom would flee jurisdiction and the possibility that if he reached Germany he wouldn't be extradited to face the charges.

"The real question though on the bail application is whether there is any incentive to flee the jurisdiction," Mr. McNaughton said. "If the applicant were able to leave the country undetected and travel to Germany he would be safe from extradition...While the U.S. government's argument on flight risk in general is not as strong as initially suggested nonetheless I am left in the position that there is a risk and it is a significant risk."

Mr. Dotcom was named in a Federal Bureau of Investigation indictment last week as the founder and, until last year, chief executive of Megaupload. He was arrested alongside Megaupload Chief Marketing Officer Finn Batato, 38, Chief Technical Officer, Director and co-founder Mathias Ortmann, 40, both from Germany, and Dutch national Bram van der Kolk, 29.

A decision on the fate of his colleagues has yet to be made. However, Mr. McNaughton said at Mr. Dotcom's bail hearing Monday that his decision on their fate would depend on that of Mr. Dotcom.

Authorities claim Megaupload Ltd., based in Hong Kong, and its collection of websites generated more than $175 million in criminal proceeds and caused more than half a billion dollars in harm to copyright owners.

Megaupload, and similar online storage sites known as cyberlockers, have many legitimate uses, such as allowing people to share large presentation files and home movies.

A hearing on extradition is expected to take "many months," Mr. McNaughton said.