An internet pioneer or a criminal mastermind? The answer depends on who you ask.
In this episode, we explore the extraordinary story of Kim Dotcom, the man behind Megaupload.com, and the rise and fall of his empire.
[00:00:00] Hello, hello hello, and welcome to English Learning for Curious Minds, by Leonardo English.
[00:00:11] The show where you can listen to fascinating stories, and learn weird and wonderful things about the world at the same time as improving your English.
[00:00:20] I'm Alastair Budge, and today we are going to be talking about a man called Kim Dotcom.
[00:00:27] To some, he was an Internet pioneer, an entrepreneur who took from the rich and gave to the poor.
[00:00:35] To others, he was a thief, a pirate, a criminal who stole hundreds of millions of dollars and grew magnificently wealthy in the process.
[00:00:45] Ok then, Kim Dotcom.
[00:00:50] New Zealand is not the sort of place that one traditionally associates with huge police raids. It is the land of green mountains, beautiful lakes, it’s a country that famously has more sheep than people.
[00:01:06] It’s a peaceful and tranquil place.
[00:01:10] But on the 20th of January, 2012, in a small community just north of the capital, Auckland, this peace and tranquillity were about to be rudely interrupted.
[00:01:26] In the early hours of the morning, a police helicopter flew over the green fields, the whirring of its blades waking up the sleepy residents below.
[00:01:36] At exactly 6.47am, it entered the grounds of a private house, a large mansion to be precise.
[00:01:45] It touched down outside. Four police officers armed with semi-automatic weapons jumped out and ran at the front door.
[00:01:55] Seconds later a swarm of police vehicles burst through the gates of the property. There were 76 police officers in total, including an elite anti-terrorism squad and a pack of attack dogs.
[00:02:10] As they entered the house, they found a pregnant woman with her three children.
[00:02:15] They pressed on, found some guests, and 10 or so members of staff, but not the person they were really looking for.
[00:02:24] 13 minutes into the raid, through a secret door and hiding in a red safe room, they located their target. A 37-year-old German man was found sitting on the floor, his hands raised in the air. He was a large man, 2 metres tall and weighing in at around 150 kg, with short cropped hair and glasses.
[00:02:49] He was immediately pounced on by the police, he was punched, kicked, forced to the floor, and put in handcuffs.
[00:02:59] The New Zealand police were acting on the orders of the FBI, who wanted to bring this man in to face up to 50 years in jail.
[00:03:09] His crime?
[00:03:11] Not arms dealing, terrorism, murder, assault, drug trafficking or anything like that.
[00:03:17] He was wanted because he operated a website called Megaupload.com, a website that you may well remember. This arrest would just be the start of an ongoing saga to extradite him from New Zealand to the United States, to face charges of copyright infringement, money laundering, and racketeering.
[00:03:40] This man was Kim Dotcom, a hero and technology pioneer to his supporters, and a thief of hundreds of millions of dollars of copyrighted material to American law enforcers.
[00:03:54] To understand how it got to this point, we must go back to the northern German city of Kiel in 1974, for this is where our story begins.
[00:04:06] Kim Schmitz, as he was originally called, was born to a German father and a Finnish mother. By all accounts, his childhood was not a happy one. His father was an alcoholic, and he beat the young boy and his mother.
[00:04:22] Kim's escape from the horror of his daily life came through computers.
[00:04:28] He persuaded his mother to buy him a Commodore C-16, an early computer, on which he taught himself to program. He wanted to play computer games, but the problem was that the software was expensive.
[00:04:42] So, he figured out how to make copies of it. And when he figured out how to do this, well he realised he could also sell these copies to his school friends.
[00:04:55] As he figured out how to do more and more with computers, he got bolder and bolder, pushing the limits of what was possible for a teenage computer enthusiast in West Germany.
[00:05:07] He broke into the NASA website because he wanted, and I’m quoting directly here, “to find out if there was any evidence that aliens existed”.
[00:05:17] And during the Gulf War he claimed to have broken into the U.S. Defense Department's computer system and "found some servers with real time connections to spy satellites' monitoring Saddam Hussein's palace.”
[00:05:31] He was a hacker, and clearly a talented one.
[00:05:36] And as his hacks grew bolder and more high profile, he started to develop a name for himself. His hacker name was “Kimble”, and he would leave a calling card of the name “Kimble” and two skulls on any system that he hacked.
[00:05:54] But while some hackers avoid publicity, preferring to remain anonymous, in the dark, Kim actively sought the attention of the press.
[00:06:06] In a December 1992 edition of Forbes magazine he was showcased as an example of this new subgenre, the “hacker”. The magazine wrote, and I’m quoting directly, “Take this 19 year old called Kimble. Located in Germany, he is the leader of Dope, an international group of hackers.”
[00:06:27] Kim made the most of the fact that the journalists who were writing about hackers and hacking culture had essentially zero technical knowledge, they knew nothing about the world of computers and of hackers.
[00:06:42] Kim used this to an advantage, he knew he could say anything, and given that the editors wanted a story about the threat posed by criminal hackers, he knew that whatever he said would be printed.
[00:06:56] He talked about the huge power of the hacker, portraying himself as someone who had the skills to do anything on the Internet, to hack into any system, a self-proclaimed teenage Dr Evil armed only with a computer.
[00:07:12] This might have been a slight exaggeration, but it wasn’t far off.
[00:07:17] He boasted that he had made $200,000 hacking American phone systems, and of having developed an encrypted, unhackable phone.
[00:07:27] This was all before his 20th birthday, and he wasted no time using the money he made to buy luxury cars, exotic holidays, and generally live a flamboyant lifestyle, posing in front of aeroplanes and superyachts, portraying himself as spectacularly wealthy.
[00:07:46] It didn’t take long for his exploits to arouse the attention of the authorities.
[00:07:53] In 1994, when he was 20 years old, he was raided by the German police, but he escaped any serious jail time because he was legally underage at the time that any crime would have taken place.
[00:08:07] He claimed to have learned his lesson, and used the fame, at least fame in hacker circles, to launch what would be a lucrative data security business, helping large companies like Lufthansa, the German aircraft company, protect themselves against people like him.
[00:08:26] But it didn’t take long for him to get bored and switch back over to the dark side, the hacker side, or at least the side of the internet entrepreneur who isn’t afraid of a brush with the law.
[00:08:41] He was part hacker, part businessman, and for both sides of his character he was a talented self-publicist.
[00:08:48] He would make grand announcements, like that he had hacked into Osama Bin Laden’s bank accounts, or that he had stolen $20 million from Citibank and given it to Greenpeace, knowing full well that these catchy headlines would be sure to make it into the press, and the journalists writing the story would have little way of verifying Kim’s claims, of checking they were true.
[00:09:14] Greenpeace, by the way, reported that it was completely not true that Kim had hacked $20 million from Citibank and given it to them, it was a straight up lie.
[00:09:24] But it didn’t matter, Kim knew that the press would print it. And he knew something else that would always get the attention of a journalist: money.
[00:09:35] He would always be more than happy to self-report his net worth, how much money he had, with one Guardian article from 2001 reporting that the then 27-year-old hacker was worth a billion Euros, and another article that year reporting that one of his companies alone was worth €200 million.
[00:09:59] I’ll read you a quote from one of these Guardian articles, because it gives you an idea of why he was so easy to write about:
[00:10:07] The 6'4", 18-stone giant has since divided his time between growing Kimvestor - which he values at 200m euros - and spending his money on top models, fast cars and expensive boats. He now owns a Challenger jet, a helicopter, several sports cars and a yacht. Last May he spent $1m chartering a 240-foot luxury yacht for a week, mooring it in Monte Carlo harbour for the Monaco Formula One Grand Prix and throwing lavish parties for guests including Prince Rainier of Monaco. End quote.
[00:10:48] And 2001, the year these Guardian articles came out, would also be the year that he had his first serious brush with the law, that he would get into trouble with the authorities.
[00:11:01] This was in the era of the dot com boom and then crash, and in the middle of it Kim bought shares in a struggling almost bankrupt internet company called LetsBuyIt, and then promptly announced that he was going to invest €50 million in the company.
[00:11:21] When the news of this got out, people rushed to buy the stock, making the stock price shoot up. People thought that Kim must know something they didn’t, this was going to be the next big thing; why else would Kim put so much money into it? But all Kim did was promptly sell all of his stock when the price increased, netting himself a tidy €1.5 million in profits.
[00:11:49] Tidy, perhaps, but it was illegal. You can’t do this, it’s called insider trading. And it comes with serious legal consequences.
[00:12:00] He was pursued by the German authorities, but fled to Thailand. He maintained that he didn’t know that what he had done was a crime, saying it was a simple mistake. And indeed, even after he was eventually arrested by the Thai police and extradited back to Germany, he escaped jail.
[00:12:21] But all of this would pale in comparison for what was to come.
[00:12:27] Instead of going up against the relatively small-fry of business communications companies and some minor insider trading, he went up against Hollywood.
[00:12:37] Instead of making a few million dollars in profits, he started a company that made hundreds of millions.
[00:12:44] Instead of some niche websites, he built a website that, at its peak, was the 13th most popular website in the world and responsible for 4% of all internet traffic.
[00:12:58] Instead of a knock on the door by the German police would come helicopters and attack dogs ordered by the FBI.
[00:13:07] And instead of a suspended sentence, no jail time, he would face charges of up to 50 years in prison.
[00:13:15] The website in question was called Megaupload.com; you may well remember it.
[00:13:22] He started the company in 2005. It was a free file sharing service, allowing anyone with an internet connection to upload a file to the Megaupload servers, so that it could be downloaded by anyone else.
[00:13:37] If you are familiar with things like Google Drive or Dropbox, it was the same idea, but with an important distinction, a key difference: Megaupload was a treasure trove of pirated content, of films and music that had been copied, uploaded to Megaupload.com’s servers, and were now free for anyone to access.
[00:14:01] Yes, there was a “Premium” paid tier of Megaupload, which gave people things like faster downloads, and this premium tier did bring in over a hundred million dollars in revenue every year. But for everyone else, it was free. You could download the latest Hollywood movies for free, at the click of a button, and watch them in the comfort of your own home.
[00:14:26] And over 50 million people did this every single day.
[00:14:31] I was a university student at the height of Megaupload’s popularity, and if you put me on the spot and asked whether my friends and I had ever downloaded any of these pirated films, I would probably have to say “no comment”.
[00:14:45] But with so many people using the site, so many people watching pirated content and Hollywood not seeing a penny from it, the good times would only last so long.
[00:14:58] Kim, who by this time had legally changed his surname from Schmitz to Dotcom, had told the authorities that Megaupload was doing everything it could to restrict the amount of pirated content uploaded to the site.
[00:15:13] Whenever the content owners contacted Megaupload to inform them of a breach of copyright, Megaupload would remove the offending material.
[00:15:23] There were internal tools, checks and balances, to minimise the amount of copyrighted material that made its way onto the file-sharing service.
[00:15:32] And, Megaupload couldn’t stop everything. After all, it was an absolutely massive website, with millions of hours of content being uploaded every single day. How could you ever keep up with this?
[00:15:46] By this point, Kim had moved again, fleeing Hong Kong, where he had allegedly been working in a luxury office suite in a hotel that cost $13,000 every single day.
[00:15:59] He set up a new base in New Zealand, a very long way away from the European and American authorities who might want to ask him uncomfortable questions about Megaupload.
[00:16:11] He received New Zealand citizenship, gave substantial amounts of money to the Christchurch earthquake relief fund, brought his family with him, and had started a completely new life in the country.
[00:16:24] He wasn’t a completely new man, however. He brought with him a fleet of expensive cars, all of his gadgets, and leased a sprawling piece of land that he called “Dotcom mansion”.
[00:16:37] But, if he thought that moving to New Zealand would be sufficient, in the early morning of January 20th, of 2012, he would realise he was wrong.
[00:16:49] As you heard at the start of the episode, there was a huge police raid, a raid more appropriate for some kind of international terrorist ring or drug cartel than a middle aged computer programmer.
[00:17:02] After the raid, he was brought into custody. The police confiscated $5 million worth of supercars, eight flat TV screens, jet skis, and a plethora of other souvenirs and valuable collector’s items that Kim Dotcom had been storing at his house. They seized millions of dollars in cash, froze 50 bank accounts with links to Dotcom, and–of course–shut down Megaupload.
[00:17:29] The authorities succeeded in taking away much of his worldly possessions and shutting down the offending site, but the FBI didn’t have the same luck with its goal of extraditing Dotcom to the United States, where he stood accused of costing songwriters and filmmakers $500 million in lost revenue.
[00:17:50] Kim Dotcom fought the extradition order tooth and nail. He argued that the raid was unlawful, and in fact a judge did rule in his favour and he ended up winning damages for how he was treated.
[00:18:06] The raid was more than 11 years ago, and the fight against extradition is still ongoing.
[00:18:13] But if you thought that Kim Dotcom would have retreated into the background and focussed solely on clearing his name and fighting the criminal charges against him, no, that’s not the sort of person he is.
[00:18:27] Since then, he has founded another software company, started his own political party in New Zealand, called “The Internet Party”, accused Barack Obama of colluding with Hollywood to arrange his arrest, in exchange for support for Obama’s presidential campaign, and can generally be found on Twitter tweeting some controversial opinions.
[00:18:48] And another fun piece of trivia about him is that, at the time of his arrest, he was also the number one player, the top-ranked player, in the entire world at Call of Duty Modern Warfare, a very popular video game.
[00:19:03] To conclude, Kim Dotcom is only 49, as of the time of making this episode.
[00:19:10] In the less than half-century he has been alive, he has hacked NASA, moved countries multiple times, been chased and arrested by the German, Thai and New Zealand police, started one of the most popular websites in the world, become a bogeyman to the most powerful filmmakers in the world, and he has even released a music album that got to number eight in the New Zealand charts.
[00:19:33] Say what you want about Kim Dotcom, but the one thing you can certainly not accuse him of is being boring.
[00:19:42] OK then, that is it for today's episode on the flamboyant, eccentric personality that is Kim Dotcom.
[00:19:50] I hope it's been an interesting one, and that you've learnt something new.
[00:19:54] As always, I would love to know what you thought about this episode.
[00:19:57] Did you ever use Megaupload.com? If so, did you know about the man behind the website?
[00:20:04] And what do you think about Kim Dotcom? Hacker who made a few mistakes, or criminal mastermind who stole and profited from other people’s work?
[00:20:13] I would love to know, so let’s get this discussion started.
[00:20:17] You can head right into our community forum, which is at community.leonardoenglish.com and get chatting away to other curious minds.
[00:20:25] You've been listening to English Learning for Curious Minds, by Leonardo English.
[00:20:29] I'm Alastair Budge, you stay safe, and I'll catch you in the next episode.
[END OF EPISODE]
[00:00:00] Hello, hello hello, and welcome to English Learning for Curious Minds, by Leonardo English.
[00:00:11] The show where you can listen to fascinating stories, and learn weird and wonderful things about the world at the same time as improving your English.
[00:00:20] I'm Alastair Budge, and today we are going to be talking about a man called Kim Dotcom.
[00:00:27] To some, he was an Internet pioneer, an entrepreneur who took from the rich and gave to the poor.
[00:00:35] To others, he was a thief, a pirate, a criminal who stole hundreds of millions of dollars and grew magnificently wealthy in the process.
[00:00:45] Ok then, Kim Dotcom.
[00:00:50] New Zealand is not the sort of place that one traditionally associates with huge police raids. It is the land of green mountains, beautiful lakes, it’s a country that famously has more sheep than people.
[00:01:06] It’s a peaceful and tranquil place.
[00:01:10] But on the 20th of January, 2012, in a small community just north of the capital, Auckland, this peace and tranquillity were about to be rudely interrupted.
[00:01:26] In the early hours of the morning, a police helicopter flew over the green fields, the whirring of its blades waking up the sleepy residents below.
[00:01:36] At exactly 6.47am, it entered the grounds of a private house, a large mansion to be precise.
[00:01:45] It touched down outside. Four police officers armed with semi-automatic weapons jumped out and ran at the front door.
[00:01:55] Seconds later a swarm of police vehicles burst through the gates of the property. There were 76 police officers in total, including an elite anti-terrorism squad and a pack of attack dogs.
[00:02:10] As they entered the house, they found a pregnant woman with her three children.
[00:02:15] They pressed on, found some guests, and 10 or so members of staff, but not the person they were really looking for.
[00:02:24] 13 minutes into the raid, through a secret door and hiding in a red safe room, they located their target. A 37-year-old German man was found sitting on the floor, his hands raised in the air. He was a large man, 2 metres tall and weighing in at around 150 kg, with short cropped hair and glasses.
[00:02:49] He was immediately pounced on by the police, he was punched, kicked, forced to the floor, and put in handcuffs.
[00:02:59] The New Zealand police were acting on the orders of the FBI, who wanted to bring this man in to face up to 50 years in jail.
[00:03:09] His crime?
[00:03:11] Not arms dealing, terrorism, murder, assault, drug trafficking or anything like that.
[00:03:17] He was wanted because he operated a website called Megaupload.com, a website that you may well remember. This arrest would just be the start of an ongoing saga to extradite him from New Zealand to the United States, to face charges of copyright infringement, money laundering, and racketeering.
[00:03:40] This man was Kim Dotcom, a hero and technology pioneer to his supporters, and a thief of hundreds of millions of dollars of copyrighted material to American law enforcers.
[00:03:54] To understand how it got to this point, we must go back to the northern German city of Kiel in 1974, for this is where our story begins.
[00:04:06] Kim Schmitz, as he was originally called, was born to a German father and a Finnish mother. By all accounts, his childhood was not a happy one. His father was an alcoholic, and he beat the young boy and his mother.
[00:04:22] Kim's escape from the horror of his daily life came through computers.
[00:04:28] He persuaded his mother to buy him a Commodore C-16, an early computer, on which he taught himself to program. He wanted to play computer games, but the problem was that the software was expensive.
[00:04:42] So, he figured out how to make copies of it. And when he figured out how to do this, well he realised he could also sell these copies to his school friends.
[00:04:55] As he figured out how to do more and more with computers, he got bolder and bolder, pushing the limits of what was possible for a teenage computer enthusiast in West Germany.
[00:05:07] He broke into the NASA website because he wanted, and I’m quoting directly here, “to find out if there was any evidence that aliens existed”.
[00:05:17] And during the Gulf War he claimed to have broken into the U.S. Defense Department's computer system and "found some servers with real time connections to spy satellites' monitoring Saddam Hussein's palace.”
[00:05:31] He was a hacker, and clearly a talented one.
[00:05:36] And as his hacks grew bolder and more high profile, he started to develop a name for himself. His hacker name was “Kimble”, and he would leave a calling card of the name “Kimble” and two skulls on any system that he hacked.
[00:05:54] But while some hackers avoid publicity, preferring to remain anonymous, in the dark, Kim actively sought the attention of the press.
[00:06:06] In a December 1992 edition of Forbes magazine he was showcased as an example of this new subgenre, the “hacker”. The magazine wrote, and I’m quoting directly, “Take this 19 year old called Kimble. Located in Germany, he is the leader of Dope, an international group of hackers.”
[00:06:27] Kim made the most of the fact that the journalists who were writing about hackers and hacking culture had essentially zero technical knowledge, they knew nothing about the world of computers and of hackers.
[00:06:42] Kim used this to an advantage, he knew he could say anything, and given that the editors wanted a story about the threat posed by criminal hackers, he knew that whatever he said would be printed.
[00:06:56] He talked about the huge power of the hacker, portraying himself as someone who had the skills to do anything on the Internet, to hack into any system, a self-proclaimed teenage Dr Evil armed only with a computer.
[00:07:12] This might have been a slight exaggeration, but it wasn’t far off.
[00:07:17] He boasted that he had made $200,000 hacking American phone systems, and of having developed an encrypted, unhackable phone.
[00:07:27] This was all before his 20th birthday, and he wasted no time using the money he made to buy luxury cars, exotic holidays, and generally live a flamboyant lifestyle, posing in front of aeroplanes and superyachts, portraying himself as spectacularly wealthy.
[00:07:46] It didn’t take long for his exploits to arouse the attention of the authorities.
[00:07:53] In 1994, when he was 20 years old, he was raided by the German police, but he escaped any serious jail time because he was legally underage at the time that any crime would have taken place.
[00:08:07] He claimed to have learned his lesson, and used the fame, at least fame in hacker circles, to launch what would be a lucrative data security business, helping large companies like Lufthansa, the German aircraft company, protect themselves against people like him.
[00:08:26] But it didn’t take long for him to get bored and switch back over to the dark side, the hacker side, or at least the side of the internet entrepreneur who isn’t afraid of a brush with the law.
[00:08:41] He was part hacker, part businessman, and for both sides of his character he was a talented self-publicist.
[00:08:48] He would make grand announcements, like that he had hacked into Osama Bin Laden’s bank accounts, or that he had stolen $20 million from Citibank and given it to Greenpeace, knowing full well that these catchy headlines would be sure to make it into the press, and the journalists writing the story would have little way of verifying Kim’s claims, of checking they were true.
[00:09:14] Greenpeace, by the way, reported that it was completely not true that Kim had hacked $20 million from Citibank and given it to them, it was a straight up lie.
[00:09:24] But it didn’t matter, Kim knew that the press would print it. And he knew something else that would always get the attention of a journalist: money.
[00:09:35] He would always be more than happy to self-report his net worth, how much money he had, with one Guardian article from 2001 reporting that the then 27-year-old hacker was worth a billion Euros, and another article that year reporting that one of his companies alone was worth €200 million.
[00:09:59] I’ll read you a quote from one of these Guardian articles, because it gives you an idea of why he was so easy to write about:
[00:10:07] The 6'4", 18-stone giant has since divided his time between growing Kimvestor - which he values at 200m euros - and spending his money on top models, fast cars and expensive boats. He now owns a Challenger jet, a helicopter, several sports cars and a yacht. Last May he spent $1m chartering a 240-foot luxury yacht for a week, mooring it in Monte Carlo harbour for the Monaco Formula One Grand Prix and throwing lavish parties for guests including Prince Rainier of Monaco. End quote.
[00:10:48] And 2001, the year these Guardian articles came out, would also be the year that he had his first serious brush with the law, that he would get into trouble with the authorities.
[00:11:01] This was in the era of the dot com boom and then crash, and in the middle of it Kim bought shares in a struggling almost bankrupt internet company called LetsBuyIt, and then promptly announced that he was going to invest €50 million in the company.
[00:11:21] When the news of this got out, people rushed to buy the stock, making the stock price shoot up. People thought that Kim must know something they didn’t, this was going to be the next big thing; why else would Kim put so much money into it? But all Kim did was promptly sell all of his stock when the price increased, netting himself a tidy €1.5 million in profits.
[00:11:49] Tidy, perhaps, but it was illegal. You can’t do this, it’s called insider trading. And it comes with serious legal consequences.
[00:12:00] He was pursued by the German authorities, but fled to Thailand. He maintained that he didn’t know that what he had done was a crime, saying it was a simple mistake. And indeed, even after he was eventually arrested by the Thai police and extradited back to Germany, he escaped jail.
[00:12:21] But all of this would pale in comparison for what was to come.
[00:12:27] Instead of going up against the relatively small-fry of business communications companies and some minor insider trading, he went up against Hollywood.
[00:12:37] Instead of making a few million dollars in profits, he started a company that made hundreds of millions.
[00:12:44] Instead of some niche websites, he built a website that, at its peak, was the 13th most popular website in the world and responsible for 4% of all internet traffic.
[00:12:58] Instead of a knock on the door by the German police would come helicopters and attack dogs ordered by the FBI.
[00:13:07] And instead of a suspended sentence, no jail time, he would face charges of up to 50 years in prison.
[00:13:15] The website in question was called Megaupload.com; you may well remember it.
[00:13:22] He started the company in 2005. It was a free file sharing service, allowing anyone with an internet connection to upload a file to the Megaupload servers, so that it could be downloaded by anyone else.
[00:13:37] If you are familiar with things like Google Drive or Dropbox, it was the same idea, but with an important distinction, a key difference: Megaupload was a treasure trove of pirated content, of films and music that had been copied, uploaded to Megaupload.com’s servers, and were now free for anyone to access.
[00:14:01] Yes, there was a “Premium” paid tier of Megaupload, which gave people things like faster downloads, and this premium tier did bring in over a hundred million dollars in revenue every year. But for everyone else, it was free. You could download the latest Hollywood movies for free, at the click of a button, and watch them in the comfort of your own home.
[00:14:26] And over 50 million people did this every single day.
[00:14:31] I was a university student at the height of Megaupload’s popularity, and if you put me on the spot and asked whether my friends and I had ever downloaded any of these pirated films, I would probably have to say “no comment”.
[00:14:45] But with so many people using the site, so many people watching pirated content and Hollywood not seeing a penny from it, the good times would only last so long.
[00:14:58] Kim, who by this time had legally changed his surname from Schmitz to Dotcom, had told the authorities that Megaupload was doing everything it could to restrict the amount of pirated content uploaded to the site.
[00:15:13] Whenever the content owners contacted Megaupload to inform them of a breach of copyright, Megaupload would remove the offending material.
[00:15:23] There were internal tools, checks and balances, to minimise the amount of copyrighted material that made its way onto the file-sharing service.
[00:15:32] And, Megaupload couldn’t stop everything. After all, it was an absolutely massive website, with millions of hours of content being uploaded every single day. How could you ever keep up with this?
[00:15:46] By this point, Kim had moved again, fleeing Hong Kong, where he had allegedly been working in a luxury office suite in a hotel that cost $13,000 every single day.
[00:15:59] He set up a new base in New Zealand, a very long way away from the European and American authorities who might want to ask him uncomfortable questions about Megaupload.
[00:16:11] He received New Zealand citizenship, gave substantial amounts of money to the Christchurch earthquake relief fund, brought his family with him, and had started a completely new life in the country.
[00:16:24] He wasn’t a completely new man, however. He brought with him a fleet of expensive cars, all of his gadgets, and leased a sprawling piece of land that he called “Dotcom mansion”.
[00:16:37] But, if he thought that moving to New Zealand would be sufficient, in the early morning of January 20th, of 2012, he would realise he was wrong.
[00:16:49] As you heard at the start of the episode, there was a huge police raid, a raid more appropriate for some kind of international terrorist ring or drug cartel than a middle aged computer programmer.
[00:17:02] After the raid, he was brought into custody. The police confiscated $5 million worth of supercars, eight flat TV screens, jet skis, and a plethora of other souvenirs and valuable collector’s items that Kim Dotcom had been storing at his house. They seized millions of dollars in cash, froze 50 bank accounts with links to Dotcom, and–of course–shut down Megaupload.
[00:17:29] The authorities succeeded in taking away much of his worldly possessions and shutting down the offending site, but the FBI didn’t have the same luck with its goal of extraditing Dotcom to the United States, where he stood accused of costing songwriters and filmmakers $500 million in lost revenue.
[00:17:50] Kim Dotcom fought the extradition order tooth and nail. He argued that the raid was unlawful, and in fact a judge did rule in his favour and he ended up winning damages for how he was treated.
[00:18:06] The raid was more than 11 years ago, and the fight against extradition is still ongoing.
[00:18:13] But if you thought that Kim Dotcom would have retreated into the background and focussed solely on clearing his name and fighting the criminal charges against him, no, that’s not the sort of person he is.
[00:18:27] Since then, he has founded another software company, started his own political party in New Zealand, called “The Internet Party”, accused Barack Obama of colluding with Hollywood to arrange his arrest, in exchange for support for Obama’s presidential campaign, and can generally be found on Twitter tweeting some controversial opinions.
[00:18:48] And another fun piece of trivia about him is that, at the time of his arrest, he was also the number one player, the top-ranked player, in the entire world at Call of Duty Modern Warfare, a very popular video game.
[00:19:03] To conclude, Kim Dotcom is only 49, as of the time of making this episode.
[00:19:10] In the less than half-century he has been alive, he has hacked NASA, moved countries multiple times, been chased and arrested by the German, Thai and New Zealand police, started one of the most popular websites in the world, become a bogeyman to the most powerful filmmakers in the world, and he has even released a music album that got to number eight in the New Zealand charts.
[00:19:33] Say what you want about Kim Dotcom, but the one thing you can certainly not accuse him of is being boring.
[00:19:42] OK then, that is it for today's episode on the flamboyant, eccentric personality that is Kim Dotcom.
[00:19:50] I hope it's been an interesting one, and that you've learnt something new.
[00:19:54] As always, I would love to know what you thought about this episode.
[00:19:57] Did you ever use Megaupload.com? If so, did you know about the man behind the website?
[00:20:04] And what do you think about Kim Dotcom? Hacker who made a few mistakes, or criminal mastermind who stole and profited from other people’s work?
[00:20:13] I would love to know, so let’s get this discussion started.
[00:20:17] You can head right into our community forum, which is at community.leonardoenglish.com and get chatting away to other curious minds.
[00:20:25] You've been listening to English Learning for Curious Minds, by Leonardo English.
[00:20:29] I'm Alastair Budge, you stay safe, and I'll catch you in the next episode.
[END OF EPISODE]
[00:00:00] Hello, hello hello, and welcome to English Learning for Curious Minds, by Leonardo English.
[00:00:11] The show where you can listen to fascinating stories, and learn weird and wonderful things about the world at the same time as improving your English.
[00:00:20] I'm Alastair Budge, and today we are going to be talking about a man called Kim Dotcom.
[00:00:27] To some, he was an Internet pioneer, an entrepreneur who took from the rich and gave to the poor.
[00:00:35] To others, he was a thief, a pirate, a criminal who stole hundreds of millions of dollars and grew magnificently wealthy in the process.
[00:00:45] Ok then, Kim Dotcom.
[00:00:50] New Zealand is not the sort of place that one traditionally associates with huge police raids. It is the land of green mountains, beautiful lakes, it’s a country that famously has more sheep than people.
[00:01:06] It’s a peaceful and tranquil place.
[00:01:10] But on the 20th of January, 2012, in a small community just north of the capital, Auckland, this peace and tranquillity were about to be rudely interrupted.
[00:01:26] In the early hours of the morning, a police helicopter flew over the green fields, the whirring of its blades waking up the sleepy residents below.
[00:01:36] At exactly 6.47am, it entered the grounds of a private house, a large mansion to be precise.
[00:01:45] It touched down outside. Four police officers armed with semi-automatic weapons jumped out and ran at the front door.
[00:01:55] Seconds later a swarm of police vehicles burst through the gates of the property. There were 76 police officers in total, including an elite anti-terrorism squad and a pack of attack dogs.
[00:02:10] As they entered the house, they found a pregnant woman with her three children.
[00:02:15] They pressed on, found some guests, and 10 or so members of staff, but not the person they were really looking for.
[00:02:24] 13 minutes into the raid, through a secret door and hiding in a red safe room, they located their target. A 37-year-old German man was found sitting on the floor, his hands raised in the air. He was a large man, 2 metres tall and weighing in at around 150 kg, with short cropped hair and glasses.
[00:02:49] He was immediately pounced on by the police, he was punched, kicked, forced to the floor, and put in handcuffs.
[00:02:59] The New Zealand police were acting on the orders of the FBI, who wanted to bring this man in to face up to 50 years in jail.
[00:03:09] His crime?
[00:03:11] Not arms dealing, terrorism, murder, assault, drug trafficking or anything like that.
[00:03:17] He was wanted because he operated a website called Megaupload.com, a website that you may well remember. This arrest would just be the start of an ongoing saga to extradite him from New Zealand to the United States, to face charges of copyright infringement, money laundering, and racketeering.
[00:03:40] This man was Kim Dotcom, a hero and technology pioneer to his supporters, and a thief of hundreds of millions of dollars of copyrighted material to American law enforcers.
[00:03:54] To understand how it got to this point, we must go back to the northern German city of Kiel in 1974, for this is where our story begins.
[00:04:06] Kim Schmitz, as he was originally called, was born to a German father and a Finnish mother. By all accounts, his childhood was not a happy one. His father was an alcoholic, and he beat the young boy and his mother.
[00:04:22] Kim's escape from the horror of his daily life came through computers.
[00:04:28] He persuaded his mother to buy him a Commodore C-16, an early computer, on which he taught himself to program. He wanted to play computer games, but the problem was that the software was expensive.
[00:04:42] So, he figured out how to make copies of it. And when he figured out how to do this, well he realised he could also sell these copies to his school friends.
[00:04:55] As he figured out how to do more and more with computers, he got bolder and bolder, pushing the limits of what was possible for a teenage computer enthusiast in West Germany.
[00:05:07] He broke into the NASA website because he wanted, and I’m quoting directly here, “to find out if there was any evidence that aliens existed”.
[00:05:17] And during the Gulf War he claimed to have broken into the U.S. Defense Department's computer system and "found some servers with real time connections to spy satellites' monitoring Saddam Hussein's palace.”
[00:05:31] He was a hacker, and clearly a talented one.
[00:05:36] And as his hacks grew bolder and more high profile, he started to develop a name for himself. His hacker name was “Kimble”, and he would leave a calling card of the name “Kimble” and two skulls on any system that he hacked.
[00:05:54] But while some hackers avoid publicity, preferring to remain anonymous, in the dark, Kim actively sought the attention of the press.
[00:06:06] In a December 1992 edition of Forbes magazine he was showcased as an example of this new subgenre, the “hacker”. The magazine wrote, and I’m quoting directly, “Take this 19 year old called Kimble. Located in Germany, he is the leader of Dope, an international group of hackers.”
[00:06:27] Kim made the most of the fact that the journalists who were writing about hackers and hacking culture had essentially zero technical knowledge, they knew nothing about the world of computers and of hackers.
[00:06:42] Kim used this to an advantage, he knew he could say anything, and given that the editors wanted a story about the threat posed by criminal hackers, he knew that whatever he said would be printed.
[00:06:56] He talked about the huge power of the hacker, portraying himself as someone who had the skills to do anything on the Internet, to hack into any system, a self-proclaimed teenage Dr Evil armed only with a computer.
[00:07:12] This might have been a slight exaggeration, but it wasn’t far off.
[00:07:17] He boasted that he had made $200,000 hacking American phone systems, and of having developed an encrypted, unhackable phone.
[00:07:27] This was all before his 20th birthday, and he wasted no time using the money he made to buy luxury cars, exotic holidays, and generally live a flamboyant lifestyle, posing in front of aeroplanes and superyachts, portraying himself as spectacularly wealthy.
[00:07:46] It didn’t take long for his exploits to arouse the attention of the authorities.
[00:07:53] In 1994, when he was 20 years old, he was raided by the German police, but he escaped any serious jail time because he was legally underage at the time that any crime would have taken place.
[00:08:07] He claimed to have learned his lesson, and used the fame, at least fame in hacker circles, to launch what would be a lucrative data security business, helping large companies like Lufthansa, the German aircraft company, protect themselves against people like him.
[00:08:26] But it didn’t take long for him to get bored and switch back over to the dark side, the hacker side, or at least the side of the internet entrepreneur who isn’t afraid of a brush with the law.
[00:08:41] He was part hacker, part businessman, and for both sides of his character he was a talented self-publicist.
[00:08:48] He would make grand announcements, like that he had hacked into Osama Bin Laden’s bank accounts, or that he had stolen $20 million from Citibank and given it to Greenpeace, knowing full well that these catchy headlines would be sure to make it into the press, and the journalists writing the story would have little way of verifying Kim’s claims, of checking they were true.
[00:09:14] Greenpeace, by the way, reported that it was completely not true that Kim had hacked $20 million from Citibank and given it to them, it was a straight up lie.
[00:09:24] But it didn’t matter, Kim knew that the press would print it. And he knew something else that would always get the attention of a journalist: money.
[00:09:35] He would always be more than happy to self-report his net worth, how much money he had, with one Guardian article from 2001 reporting that the then 27-year-old hacker was worth a billion Euros, and another article that year reporting that one of his companies alone was worth €200 million.
[00:09:59] I’ll read you a quote from one of these Guardian articles, because it gives you an idea of why he was so easy to write about:
[00:10:07] The 6'4", 18-stone giant has since divided his time between growing Kimvestor - which he values at 200m euros - and spending his money on top models, fast cars and expensive boats. He now owns a Challenger jet, a helicopter, several sports cars and a yacht. Last May he spent $1m chartering a 240-foot luxury yacht for a week, mooring it in Monte Carlo harbour for the Monaco Formula One Grand Prix and throwing lavish parties for guests including Prince Rainier of Monaco. End quote.
[00:10:48] And 2001, the year these Guardian articles came out, would also be the year that he had his first serious brush with the law, that he would get into trouble with the authorities.
[00:11:01] This was in the era of the dot com boom and then crash, and in the middle of it Kim bought shares in a struggling almost bankrupt internet company called LetsBuyIt, and then promptly announced that he was going to invest €50 million in the company.
[00:11:21] When the news of this got out, people rushed to buy the stock, making the stock price shoot up. People thought that Kim must know something they didn’t, this was going to be the next big thing; why else would Kim put so much money into it? But all Kim did was promptly sell all of his stock when the price increased, netting himself a tidy €1.5 million in profits.
[00:11:49] Tidy, perhaps, but it was illegal. You can’t do this, it’s called insider trading. And it comes with serious legal consequences.
[00:12:00] He was pursued by the German authorities, but fled to Thailand. He maintained that he didn’t know that what he had done was a crime, saying it was a simple mistake. And indeed, even after he was eventually arrested by the Thai police and extradited back to Germany, he escaped jail.
[00:12:21] But all of this would pale in comparison for what was to come.
[00:12:27] Instead of going up against the relatively small-fry of business communications companies and some minor insider trading, he went up against Hollywood.
[00:12:37] Instead of making a few million dollars in profits, he started a company that made hundreds of millions.
[00:12:44] Instead of some niche websites, he built a website that, at its peak, was the 13th most popular website in the world and responsible for 4% of all internet traffic.
[00:12:58] Instead of a knock on the door by the German police would come helicopters and attack dogs ordered by the FBI.
[00:13:07] And instead of a suspended sentence, no jail time, he would face charges of up to 50 years in prison.
[00:13:15] The website in question was called Megaupload.com; you may well remember it.
[00:13:22] He started the company in 2005. It was a free file sharing service, allowing anyone with an internet connection to upload a file to the Megaupload servers, so that it could be downloaded by anyone else.
[00:13:37] If you are familiar with things like Google Drive or Dropbox, it was the same idea, but with an important distinction, a key difference: Megaupload was a treasure trove of pirated content, of films and music that had been copied, uploaded to Megaupload.com’s servers, and were now free for anyone to access.
[00:14:01] Yes, there was a “Premium” paid tier of Megaupload, which gave people things like faster downloads, and this premium tier did bring in over a hundred million dollars in revenue every year. But for everyone else, it was free. You could download the latest Hollywood movies for free, at the click of a button, and watch them in the comfort of your own home.
[00:14:26] And over 50 million people did this every single day.
[00:14:31] I was a university student at the height of Megaupload’s popularity, and if you put me on the spot and asked whether my friends and I had ever downloaded any of these pirated films, I would probably have to say “no comment”.
[00:14:45] But with so many people using the site, so many people watching pirated content and Hollywood not seeing a penny from it, the good times would only last so long.
[00:14:58] Kim, who by this time had legally changed his surname from Schmitz to Dotcom, had told the authorities that Megaupload was doing everything it could to restrict the amount of pirated content uploaded to the site.
[00:15:13] Whenever the content owners contacted Megaupload to inform them of a breach of copyright, Megaupload would remove the offending material.
[00:15:23] There were internal tools, checks and balances, to minimise the amount of copyrighted material that made its way onto the file-sharing service.
[00:15:32] And, Megaupload couldn’t stop everything. After all, it was an absolutely massive website, with millions of hours of content being uploaded every single day. How could you ever keep up with this?
[00:15:46] By this point, Kim had moved again, fleeing Hong Kong, where he had allegedly been working in a luxury office suite in a hotel that cost $13,000 every single day.
[00:15:59] He set up a new base in New Zealand, a very long way away from the European and American authorities who might want to ask him uncomfortable questions about Megaupload.
[00:16:11] He received New Zealand citizenship, gave substantial amounts of money to the Christchurch earthquake relief fund, brought his family with him, and had started a completely new life in the country.
[00:16:24] He wasn’t a completely new man, however. He brought with him a fleet of expensive cars, all of his gadgets, and leased a sprawling piece of land that he called “Dotcom mansion”.
[00:16:37] But, if he thought that moving to New Zealand would be sufficient, in the early morning of January 20th, of 2012, he would realise he was wrong.
[00:16:49] As you heard at the start of the episode, there was a huge police raid, a raid more appropriate for some kind of international terrorist ring or drug cartel than a middle aged computer programmer.
[00:17:02] After the raid, he was brought into custody. The police confiscated $5 million worth of supercars, eight flat TV screens, jet skis, and a plethora of other souvenirs and valuable collector’s items that Kim Dotcom had been storing at his house. They seized millions of dollars in cash, froze 50 bank accounts with links to Dotcom, and–of course–shut down Megaupload.
[00:17:29] The authorities succeeded in taking away much of his worldly possessions and shutting down the offending site, but the FBI didn’t have the same luck with its goal of extraditing Dotcom to the United States, where he stood accused of costing songwriters and filmmakers $500 million in lost revenue.
[00:17:50] Kim Dotcom fought the extradition order tooth and nail. He argued that the raid was unlawful, and in fact a judge did rule in his favour and he ended up winning damages for how he was treated.
[00:18:06] The raid was more than 11 years ago, and the fight against extradition is still ongoing.
[00:18:13] But if you thought that Kim Dotcom would have retreated into the background and focussed solely on clearing his name and fighting the criminal charges against him, no, that’s not the sort of person he is.
[00:18:27] Since then, he has founded another software company, started his own political party in New Zealand, called “The Internet Party”, accused Barack Obama of colluding with Hollywood to arrange his arrest, in exchange for support for Obama’s presidential campaign, and can generally be found on Twitter tweeting some controversial opinions.
[00:18:48] And another fun piece of trivia about him is that, at the time of his arrest, he was also the number one player, the top-ranked player, in the entire world at Call of Duty Modern Warfare, a very popular video game.
[00:19:03] To conclude, Kim Dotcom is only 49, as of the time of making this episode.
[00:19:10] In the less than half-century he has been alive, he has hacked NASA, moved countries multiple times, been chased and arrested by the German, Thai and New Zealand police, started one of the most popular websites in the world, become a bogeyman to the most powerful filmmakers in the world, and he has even released a music album that got to number eight in the New Zealand charts.
[00:19:33] Say what you want about Kim Dotcom, but the one thing you can certainly not accuse him of is being boring.
[00:19:42] OK then, that is it for today's episode on the flamboyant, eccentric personality that is Kim Dotcom.
[00:19:50] I hope it's been an interesting one, and that you've learnt something new.
[00:19:54] As always, I would love to know what you thought about this episode.
[00:19:57] Did you ever use Megaupload.com? If so, did you know about the man behind the website?
[00:20:04] And what do you think about Kim Dotcom? Hacker who made a few mistakes, or criminal mastermind who stole and profited from other people’s work?
[00:20:13] I would love to know, so let’s get this discussion started.
[00:20:17] You can head right into our community forum, which is at community.leonardoenglish.com and get chatting away to other curious minds.
[00:20:25] You've been listening to English Learning for Curious Minds, by Leonardo English.
[00:20:29] I'm Alastair Budge, you stay safe, and I'll catch you in the next episode.
[END OF EPISODE]
