Dotcom: 'Aussies just as dumb as Kiwis'

The reported conversation sparked a hasty, whispered courtroom discussion between Kim Dotcom (pictured) and his lawyer Ron Mansfield. Photo / Jason Oxenham

"Aussies, just as dumb as kiwis," Kim Dotcom allegedly told a co-defendant as the net tightened around his Megaupload website.

The conversation is said to have taken place between the internet entrepreneur and chief technical officer Mathias Ortmann after he had been told an Australian mobile aggregator had shut down the company's operations.

Ortmann simply responded: "Hehe".

The reported conversation sparked a hasty, whispered courtroom discussion between Dotcom and his lawyer Ron Mansfield in Auckland District Court this morning.

The extradition hearing began last week and counsel on behalf of the US government Christine Gordon, QC, spent the morning outlining the case specifically against the German-born mogul.

The FBI laid charges in January 2012 when the internet entrepreneur and three others - Ortmann, Bram van der Kolk and FinnBatato - were indicted on 13 charges including copyright infringement, racketeering, money laundering and fraud.

Ms Gordon called Dotcom a "controlling mind" amidst a "tight circle of officers".

Although much of the day-to-day operations were left to Ortmann and van der Kolk, she said it would be impossible to argue Dotcom was blind to the allegedly-flagrant copyright violation involved with the site.

Ms Gordon cited emails that showed Dotcom asking for weekly, detailed progress reports from his employees.

He also paid intense attention to traffic numbers and the activities of individual users, she said.

"Copyright-infringing content could not have escaped his notice," Ms Gordon said.

In 2008 Warner Brothers allegedly contacted Megaupload with complaints about a user known as "AD" posting multiple links to protected content on the website.

"Mega continued paying AD for infringing content," Ms Gordon said. "Dotcom took no steps to have AD's content removed."

"Dotcom knew repeat infringers were violating copyright but took no steps to ensure they weren't receiving rewards from doing so."

She stressed his administration of the rewards scheme - which saw users paid cash and online benefits for driving subscriptions and traffic to the site - was proof he had a case to answer.

It is also alleged Dotcom was behind a deliberate attempt to give the Mega websites a "sanitised" appearance.

Ms Gordon said in 2007 he allegedly directed employees to upload videos from Youtube as rapidly as one per minute to boost numbers: "otherwise we look like small-fish s***".
The hearing is set down to last another three weeks.