Mathias Ortmann and Bram van der Kolk pleaded guilty to charges of causing artists to lose money by deception and being part of a criminal group at the Auckland High Court on 22 June 2022. Both men were officers in the file-hosting website Megaupload, which allowed people to illegally download songs, television shows and films. The website was shut down in 2012 with the United States bringing charges against the men and seeking to extradite them from New Zealand.
In 2021 the New Zealand Supreme Court ruled that Messrs Ortman and van der Kolk could be extradited, together with Megaupload’s founder Kim Dotcom. Justice Minister Kris Faafoi was then required to make the final decision as to whether the extradition would go ahead, although this decision could be subject to appeal.
Following an agreement with the Government of New Zealand and the US Government Ortman and van der Kolk agreed to be charged in New Zealand with similar offences to those brought in the United States. In return the US Government agreed not to extradite the pair.
On Wednesday 21 June both men pleaded guilty to conspiring with Dotcom and others, by:
- Dishonestly, without claim of right and with intent to obtain pecuniary advantage, obtaining documents, by hosting and distributing infringing copies of copyright works through the operation of megaupload.com and associated websites; and
- Causing loss by deception exceeding $1000 to other persons, namely the owners of copyright in works obtained, hosted and distributed by megaupload.com and associated websites.
The pair now face a maximum sentence of 10 years in prison in New Zealand, avoiding a potentially significantly longer jail term in the USA. They have been released on bail pending sentencing.
Kim Dotcom was not offered the same arrangement and the decision as to his extradition remains with the New Zealand Justice minister.
The outcome in this case appears to result from a deal struck between four parties: prosecutors in the US and New Zealand, and the defendants. Its easy to see what Messrs Ortman and van der Kolk get from the deal, which is the chance to stay in New Zealand and, presumably, a much less harsh penalty on conviction. The motives of the US and New Zealand prosecutors are more opaque. Should we assume that the New Zealand Crown Office have been waiting for 10 years to bring charges but held back in deference to the pre-existing US indictment? The only other explanation appears to be that the charges were brought at the request of the US prosecutors and the defendants as a pragmatic resolution to avoid several more years of contested extradition hearings and uncertainty over whether they would ever be sent to the US. If so, whilst no doubt the charges passed all the necessary tests in New Zealand, there is more than a whiff of a ‘prosecution to order’. In short, it appears that the men were prosecuted in New Zealand not because the local prosecutors decided independently on this course, but because the US Government and the defendants asked for it to break their legal stalemate.
That the US prosecutors would contemplate such a deal is further evidence of a hard-headed approach to the limits of the long arm of US jurisdiction. One can imagine several practical reasons why the US decided that a prosecution in New Zealand was better than an uncertain and potentially distant US extradition. However, a pragmatic solution in one case raises questions of consistency in others. What are the principles underpinning whether or not to offer an individual an agreement to be prosecuted in situ rather than extradited? Why did Kim Dotcom not get offered the same deal? Moreover, does this undermine US extradition requests to other jurisdictions where a local prosecution is legally possible? Has this opened up a whole new dimension in international plea bargaining?
The UK enacted the Forum Bar to try and resolve whether extradition is fair when a requested person could be prosecuted at home. However, it is a statutory bar applied by the courts based on clear criteria, one of which is whether any UK law enforcement agency has an interest in prosecuting. For all of its faults, the Forum Bar at least sets out a process and some principles by which the tension between extradition and concurrent jurisdiction can be resolved. The deal struck in New Zealand lacks any such transparency, even if ultimately it may be the outcome that best serves all competing interests.