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Kim Dotcom: The millionaire playboy behind Megaupload

THE CLOSURE of Megaupload and arrest of its operators has focused attention on Kim Dotcom, also known as Kim Schmitz, the file sharing website’s flamboyant founder.

The obese, 6ft7ins, 37-year-old playboy is accused of leading a $175m conspiracy of criminal copyright infringement, money laundering, and racketeering. It is not Kim Dotcom’s first brush with the law.

Often labelled “Germany’s most notorious hacker”, in 1998 he was handed a two-year suspended prison sentence for a string of hacking offences stretching back four years, including theft of trade secrets. He had penetrated security systems at banks and utility companies, and stolen tens of thousands of pounds.

Following his conviction, Schmitz (he apparently changed his surname to “Dotcom” more recently) went straight and set up Data Protect, a computer security company. He sold his 80 per cent stake in 2000 at the height of the dotcom boom and became a millionaire. The firm went bust in 2001.

In October that year Schmitz concocted "Young Intelligent Hackers Against Terrorism" (YIHAT), a supposed effort to find Osama bin Laden by hacking into Arab banks and websites backed up by a $10m reward.

Meanwhile he bought hundreds of thousands of dollars of shares in Letsbuyit.com, an almost-bankrupt shopping website. He announced he would invest tens of millions in the firm, which sent its shares soaring again.

Unfortunately for investors, Schmitz didn’t have the money, and sold his own stake at a profit of more than a million pounds. German authorities caught up with him in Bangkok in 2002 and prosecuted him for insider trading. He received a suspended sentence after serving five months awaiting trial. Soon after he also picked up an embezzlement conviction over an irregular loan arrangement between two of his companies.

Schmitz next emerged as the founder of Hong Kong-based Megaupload in 2005. It capitalised on the falling prices of data storage and internet bandwidth to offer users a free “cyber locker” they could use to share files via the web. For a monthly membership fee downloads would be quicker, too.

The website was a huge success, becoming the leading service of its type. Schmitz became a hate figure for copyright holders, as pictures of him posing with glamour models circulated online.

It allowed Schmitz to indulge his expensive love of fast cars, which extended to participaring in the Gumball Rally across Europe and posting videos of his 200mph exploits on YouTube under another alias, “Kimble”.

As part of yesterday’s raids, authorities seized more than 20 cars from Schmitz’s New Zealand properties, which reportedly include the country's most expensive mansion. Many of the cars had vanity licence plates, including a Rolls-Royce Phantom bearing “GOD”, an AMG Mercedes carrying “HACKER”, and another labelled “MAFIA”.

If found guilty this time, Kim Schmitz face up to 20 years in jail.