Former Megaupload Executives Sentenced to 2.5 Years in Prison

Faced with extradition to the United States to face copyright infringement, racketeering, and money laundering charges, last year Mathias Ortmann and Bram van der Kolk made a big decision.

In May 2022, the former Megaupload executives revealed that they had signed a deal to avoid extradition and would be charged with crimes in New Zealand instead. One month later, the men pleaded guilty to a raft of crimes, safe in the knowledge that any sentence would be served in New Zealand, not in a U.S. prison cell. Megaupload founder Kim Dotcom was not part of the deal.

The summary of charging facts stated that Ortmann was a 25% shareholder of Megaupload Limited and made around US$19 million from Megaupload. Colleague van der Kolk had a 2.5% share of the company and received approximately US$3 million.

“The defendants’ technical knowledge was indispensable to the creation and growth of Megaupload. Mr Dotcom ultimately determined matters of policy and direction but lacked the practical expertise to carry his wishes into effect,” the statement of facts noted.

Bram van der Kolk’s Coding Journey

“[Dotcom] relied on the defendants to set up and run the technical infrastructure of Megaupload. The offending would not have been possible without their involvement.”

Charges and Convictions

In June 2022, Ortmann and van der Kolk were convicted on four charges in total. Charges 1 and 2 related to offenses contrary to sections 98A and 7A of the Crimes Act 1961.

Section 98A of the Crimes Act 1961 states that a person is liable to imprisonment for participating in an organized criminal group; three or more people with an objective to obtain material benefits from the “commission of offenses” that are locally punishable by a four-year prison term. Section 7A of the Crimes Act 1961 relates to offenses that occurred wholly outside New Zealand but can be prosecuted locally.

The first charge related to offenses under 98A and 7A which carry a maximum sentence of five years imprisonment. The second charge was identical but carries a ten-year maximum sentence. The third charge related to offenses contrary to section 240(1)(d) and section 310 of the Crimes Act 1961. The fourth related to offenses contrary to sections 228 and 310 of the Crimes Act 1961.

Prison Sentences Handed Down at the High Court

At the High Court in Auckland today, Justice Sally Fitzgerald sentenced Mathias Ortmann to two years and seven months in prison. Bram van der Kolk received a prison sentence of two years and six months. Both will begin their sentences at Mt Eden Corrections Facility (MECF) is in the central Auckland suburb of Mt Eden.

Ortmann had faced a prison sentence of up to 10 years and six months, van der Kolk up to ten years, but their guilty pleas, cooperation – including with the FBI, rehabilitation, and an agreement to surrender NZ$10 million in overseas bank accounts, all played a part in reducing their sentences.

Since 2009, Bram has been married to Junelyn Alexis “Asia” Unana Agcaoili, a Filipina actress, television host, and model who previously appeared on the cover of FHM. Together they have a son, who was born and raised in New Zealand.

Through her company Cloud Innovations Limited, Agcaoili is a shareholder in Mega, the company built by the pair after the collapse of Megaupload. A trust in the name of Kim Dotcom’s wife, Elizabeth Donnelly, also retains shares in Mega.

According to a report from New Zealand Herald earlier this week, Bram and Mathias were hoping that the reputation ‘Mega’ had built inside the New Zealand government as a good corporate citizen would stand them in good stead.

The men were not immediately sent to serve their sentences today. Justice Sally Fitzgerald deferred imprisonment until August 1 to allow Ortmann to be present at the birth of his second child and for van der Kolk to spend time with his mother, who is in poor health.

Both men remain targets in civil lawsuits filed in the United States by the Motion Picture Association (MPA) and the Recording Industry Association of America (RIAA) related to their work on Megaupload.

So What About Kim Dotcom?

During sentencing today, Crown lawyer David Boldt suggested that had Dotcom been in court today, he would’ve been facing a possible sentence of 16 years in prison.

To date, Dotcom has chosen to fight back against all charges, something that may now prove more difficult after Ortmann and van der Kolk, who haven’t spoken with Dotcom for close to a decade, agreed to testify against him.

After the Supreme Court ruled that Kim Dotcom can indeed be extradited to face a laundry list of criminal charges in the United States, the decision to send Dotcom northeast across the Pacific lies with Minister of Justice Kiri Allan.

The extradition warrant requires her signature, but even after pen is eventually put to paper, it’s likely that Dotcom would seek a judicial review to buy more time in New Zealand.

“I have received detailed submissions from Mr Dotcom. In due course I will receive further advice on those matters before making any decision,” Allen told New Zealand Herald this week. “Unfortunately, I cannot say how long that will take.”

Dotcom Reacts to Sentencing

On Twitter this morning, Dotcom said that the US Department of Justice charged members of the so-called “Megaupload conspiracy” with 185 years in jail.

“They raided us with 72 cops and dragged us though NZ Courts for 12 yrs. Today my co-defendants got 2.6 and 2.5 yrs. This could be converted to home detention in a few months?” Dotcom questioned.

“That’s why my former partners took the deal. Not because they actually believe that they are criminals. They are not. But they were tired of fighting and gave up in exchange for a 98.5% discount of the 185 yrs we were charged with. I don’t blame them. They have been through hell.”

After earlier criticism of his former colleagues, this morning Dotcom paused to congratulate them.

“My legal team says that my co-defendants in the Megaupload case are eligible for parole after 10 months and will likely get parole as part of the deal they made with the US Govt. They will serve less than a year instead of the 185 years we were charged with. Good for them,” Dotcom wrote.

Dotcom is the only remaining Megaupload executive still facing extradition to the United States. Megaupload marketing man Finn Batato passed away last year after succumbing to cancer.

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