Kim Dotcom says he understands why Andrus Nomm cut a deal with the FBI.
Kim Dotcom says he understands why Andrus Nomm cut a deal with the FBI.
As Kim Dotcom waits for a judge to decide if he will be extradited to face criminal copyright charges, a former employee is walking out of jail after serving time on the FBI accusations the internet tycoon continues to deny.
Andrus Nomm had three years of anxiety over the charges resulting from the FBI operation against the filesharing business Megaupload.com. They were claims of a vast criminal copyright conspiracy operated through one of the world's most popular websites.
Then, earlier this year, Nomm ended the waiting by cutting a deal with United States prosecutors. The result - a 366-day sentence (with an early parole), three years of supervision and a US$175 million judgment.
A database of federal prisoners has Nomm listed as due for release today.
In return, US prosecutors got an inside man - a staff member of one of the Megaupload co-accused who would testify against Dotcom and the others.
The US criminal case against Dotcom is still a distant prospect. It took years for the extradition case to be heard against Dotcom and three of his co-accused, Finn Batato, Bram van der Kolk and Mathias Ortman.
The judge presiding over the 10-week hearing in Auckland doesn't have to decide if the four defendants are guilty - simply if there is a case to answer in US courts. It is then down to Justice Minister Amy Adams to decide if the extradition should go ahead. Her decision is likely to be appealed, whichever way it goes.
As the extradition case unfolded, Nomm passed his sentence in the United States federal prison Moshannon Valley in Clearfield County, Pennsylvania.
Autumn turned to winter at the low-security prison, with large exercise areas and long stretches of lawn, as his evidence was heard in New Zealand courts. In Auckland, as spring turned to summer, Crown lawyer Christine Gordon QC invoked the convict's evidence: "Andrus Nomm confirms they knew they were making money directly from ... copyright content on Mega sites."
Nomm's testimony was detailed in US court documents, called a "statement of facts" which Nomm signed as a "knowing and voluntary confession". It focused on the actions of Dotcom and his three New Zealand co-accused in the operation of Megaupload.
While the tycoon and his co-accused have denied all charges, Nomm testified in support of the US case. As an insider, his testimony will be key to supporting prosecution arguments the so-called "Megaconspiracy" knew what it was doing, attacking any claim the accused were acting in the belief the website was lawful.
Kim Dotcom. Photo / Michael Craig
Nomm's testimony was included in the case for extradition in New Zealand but documents showing how will not be made public until after the judge's decision has been made. The Herald is unable to report the details of the US case that Nomm pleaded guilty to in the United States until then.
But the matters that can be reported include Nomm recounting how he was hired after being flown to Manila in the Philippines to interview for a programming job.
In the FBI document, Nomm says he had never heard the name "Kim Dotcom" until after the arrests years down the track. The head of Megaupload was always Kim Schmitz to him - Dotcom's birth name.
Andrus Nomm was sentenced to a federal prison in the US in February this year.
Paid $3260-a-month, Nomm worked under Ortmann, the super-coder who built much of the software that operated Megaupload. He developed conversion software that allowed video to be played regardless of the format on which it was captured. He also spoke of van der Kolk, another facing extradition from New Zealand, whose duties included checking for "copyright infringement, child pornography, bestiality and terrorism-related content" loaded to the site by users. His statement to the FBI also referenced Batato.
After 11 months' work, "a dispute with Dotcom" led to Nomm moving to Turkey, only to return a few months later to again work for Megaupload in the Philippines.
About this time, Dotcom moved to Hong Kong, where he would be based until he was arrested. "It is Nomm's belief that Dotcom was forced to move from the Philippines because of outstanding poker debts," says the FBI document.
The FBI document speaks of dissatisfaction over money, with Nomm saying his work on the Megaclick advertising site was meant to result in him getting shares in the company. After it was finished, it was claimed "Dotcom changed his position" then promised "Nomm would receive a $1,000,000 bonus" after the Megaupload websites had been floated on the public market in a share offering. "According to Dotcom, the Mega sites were valued at $2 billion."
Nomm's initial paycheque didn't grow at the rate of others in the company. In 2010 and 2011, when the site revenues became massive, Nomm was said to have been paid about $80,000 a year. Court records claim Dotcom pulled in $20 million in 2010.
The document is clear the plea deal was an exchange.
"This statement of facts includes those facts necessary to support the plea agreement between Nomm and the government."
It also states that it is not "each and every fact", with material still held in reserve.
But there is the claim of a different story, captured in April 2012 by Dotcom's videographer Fergus Milner and a former friend of the tycoon, Alex Mardikian, who later became a source for the authorities investigating the case.
Three months after the 2012 raid, Mardikian and Milner were in Europe on a range of tasks which included filming an interview with Nomm. The video was uploaded to Dotcom's YouTube account weeks after Nomm signed the plea deal.
Nomm speaks of noticing the Megaupload site being down while sitting at his computer. At first, he thought it was an internet "blackout".
When he realised it was specific to Megaupload, he turned to the internet for information. "The first search result from Google was Megaupload was taken down," he told his interviewers.
He searched and waited - and then found the indictment on which he was named, along with Dotcom and five others. Finding his name on a large legal document alleging crime was shocking, he said.
"What the hell is happening here? It is like reading about someone else."
When news about the New Zealand arrests began filtering through, Nomm figured he was "on the list also so maybe they are coming for me".
"It was a big shock," he said in the YouTube clip.
"I couldn't sleep the next night." He sat at home and waited, expecting a knock on the door.
Nomm literally walked into trouble. After waiting a few days, he went to a local police station and asked officers if he was a wanted man.
He had with him a copy of the indictment, with his name as one of the accused. "I had printed out from home the whole 72 pages of documentation and gave it to them and said this is about me. 'What's next? What am I supposed to do now?'," he asked. It took half-an-hour of checking until an officer returned to tell him he was under arrest.
Two months in a Dutch prison followed, then release on strict monitored conditions. Nomm, like all the accused, found his assets frozen as potential proceeds on crime.
"That means I don't have any savings or assets at the moment," he told the interviewers. "I have to live off charity from friends or family. It is shocking later, but not the first moment. It didn't reach me at first. It took me time to digest it." And when he did, he felt embroiled in a drama akin to "watching some TV series" and it was "for no reason".
For Nomm, the next two years were horrid. The woman he had pursued to Rotterdam disappeared, as did his contact with the world he knew. He had health issues, no money, no job and was increasingly miserable.
Dotcom - who became flush with cash in 2013 with a new business - says he helped support him. "Against legal advice I wired money to him to help him out." He says he tried to get him work at Mega, the new cloud storage business that made him millions of dollars. Legal objections meant the job never happened, says Dotcom.
Nomm was isolated, facing increasingly long periods between seeing his son and unable to make money. Dotcom says he believes Nomm felt he had only one way out.
"After three years of this torture the US offered him a deal. He grew more and more depressed and just wanted to get out. One year in jail was his way out. I don't blame him. I can understand why Andrus did it. But it doesn't change the fact that he is innocent. Andrus made it clear in his documentary interview that he had done nothing wrong."
Like the FBI saying it has Nomm testimony in reserve, Dotcom says there are "over two hours of interview" and the Youtube clip was just a preview.
Nomm waived an extradition hearing and caught a plane to the United States. He was taken into custody on February 5, 2015 - likely the day he arrived - and the entire plea deal was done eight days later. The move caught Dotcom and the other defendants off-guard. Dotcom's US lawyer Ira Rothken told the Herald at the time Nomm's arrival in the US was "unexpected".
The deal saw Nomm plead guilty to two counts of conspiracy to commit copyright violation - the same charge Dotcom and the other five facing charges have denied. The maximum sentence on each charge was five years.
It also saw the US drop the other charges, which included the money laundering and racketeering charges. Copyright was also dropped. As part of the plea bargain, the US obtained a "money judgment" against Nomm for US$175 million, along with the court's blessing to "collect said judgment by all available means". The money was described as the "proceeds of the offence".
Assistant attorney general Leslie Caldwell greeted the plea with a strident press release in which the group were called "Mega conspirators".
"This conviction is a significant step forward in the largest criminal copyright case in US history."
Assistant FBI director Andrew McCabe praised his agents.
"Today one conspirator who infringed upon the work of countless artists, actors and musicians takes responsibility for his actions. We continue to pursue his co-conspirators until they face justice in the American legal system."
