The court heard he had a history of sexual perversion dating back to teenage visits to swimming pools and was unlikely to overcome his urges.
Mr Edlin targeted public events in the central North Island, including the Hawke's Bay A and P Show, races at Hastings and other events.
The judge said his sexual deviancy started in his mid-teens at a Napier swimming pool and he then became a peeping tom.
He used his internet website to trade his footage and also advertise his life story.
On his homepage he boosted about when he got bored with his shoecam he put the pinhole camera into the bath mat at a youth hostel.
Edlin is his mother's maiden name. Mr Edlin changed his name from Overend some time after his release.
Smith, 40, was arrested by Brazil Federal Police yesterday morning (NZ time) after someone at the Rio de Janeiro hostel he was staying in recognised him from a news report and alerted authorities.
He had fled to Brazil via Chile last week while on temporary release from Spring Hill Corrections Facility.
He was jailed for life in 1996 after fatally stabbing an unnamed Wellington man as he tried to protect his young son, whom Smith had sexually abused.
Smith ran a mail-order business from prison, WSE Marketing, with Corrections approval, until 2011.
He had completed accounting and business degrees behind bars.
Mr Edlin yesterday confirmed he had used the name David Overend and that he had met Smith in prison.
"I spent a short time in prison about 17 years ago. Both [my partner] and I have known [Smith] for a long, long time. I've pretty much kept my nose clean for the last 17 years."
According to the Companies Office, he had a 20 per cent share and was also listed as a director in a company with Smith.
Mr Edlin, who is not suspected of any wrongdoing, claimed he had nothing to do with Smith's escape to South America and said he has no regrets about making money with the killer and child molester.
"He was conducting a lot of business that didn't have anything to do with me," Mr Edlin said.
"I believe that all that money that he had on him was legitimate." Smith, registered with the Companies Office as Phillip Traynor, owned 80 per cent of shares in WSE.
Mr Edlin said the business revolved around imported Chinese goods sold online.
"It was done right under the noses of Corrections."
He said the business involved sending "paperwork back and forth" and was operating legally with Corrections approval. Corrections monitored the paperwork and company transactions.
"We've had our business records audited by Inland Revenue and came out clean as a whistle."
Mr Edlin said Smith's decision to escape defied reason. "If you've got six months to your next parole hearing, when you could be released, why would you do that?"
He knew Smith from "way way back".
He said his friend's crimes in the 1990s, which included child molestation and murder, were despicable, but he had changed since then.
"I'm not condoning what he did. What he did was horrible. He was an absolute little s*** when he was a young man."
The company was struck off last November, a year after its last annual return was filed by Traynor, and more than two years after it was revealed that the business was being run from behind bars.
Corrections ordered a review in 2011 after it was discovered there were no laws preventing Traynor, an inmate at Paremoremo Prison, from conducting the activities, media reported at the time. He was importing products from Hong Kong with Mr Edlin, and his role was supplying advice and accountancy support by phone, mail and via face-to-face prison visits.
It was those business activities that earned Smith the funds to flee NZ, and with which he was paying just $50 a week towards the tens of thousands of dollars he owed as reparation to his victims.
When the company was registered, both men used the same Hastings address that Mr Edlin currently owns.
After Smith's arrest yesterday, Brazilian journalist Alexandre Tortoriello said the fugitive had told everyone he was an Australian citizen. "People said he was very convincing," Mr Tortoriello said.
"[The hostel] is very afraid of him being released and coming back here, so they won't tell anyone their name.
"Until the federal police give a statement we don't know if he is just being questioned and will be released, or whether he has been arrested."
"Smith was using the name James Paul Andrews while he was at the hostel.
"It's not clear yet whether he will remain in custody or not because we don't know the legal grounds of the detention."
Mr Tortoriello told the New Zealand Herald Smith had slept in a six-bedroom dorm with three others.
He tried to convince one of his roommates to drive him to Sao Paulo to go sightseeing, Mr Tortoriello said.
Smith has been remanded in custody for 60 days.
- Additional reporting John Weekes, NZME. News Service.
