Kim Dotcom – The case against…


Possibly somewhat short of being as pure as the driven snow…

Nice to see Bernard Hickey weighing in, in his own inimitable style, on the Kim Dotcom saga, and what Bernard has to say makes a lot of sense.  Dotcom is hardly the “good character” that seems to have been swallowed by the Immigration Service.

Let’s not forget Dotcom is a convicted thief and insider trader who has served jail time in Germany. Germany’s Manager Magazin reported (in German) he was convicted of computer fraud and handling stolen goods in 1998. He had broken into corporate PABX systems and had also stolen telephone calling cards. He was given a probationary sentence of two years.

Three years later he was convicted of insider trading in Germany after he pumped up the price of an auction website letsbuyit by suggesting he was going to buy it and then dumping it for a profit of US$1.5 million without following through on his promise. He spent over 5 months in jail.

It was a celebrated case in Germany and cited as a reason ordinary Germans didn’t trust the stock market after 2001.

Bernard does, I think,  extrapolate a bit far from some of the quotes from Mega-Upload emails – eg using the email from Kim Dotcom urging that mass requests to delete thousands of links received from countries such as Mexico should not necessarily be complied with.  There could easily be sympathy for that position given the propensity for entities under the DMCA to claim copyright without providing any proof, and cases in which competitors have abused the DMCA provisions to shut down their rivals.  However that’s not all that is on display….there are less defensible communications to be found.

Nevertheless, the conclusion that there is a case to answer, and that extradition is therefore justified, seems on the money.

For those who wish to come to their own view, the seventy two page indictment can be found here.

Hickey castigates the naivety of the Immigration Service, and perhaps in this case he is right.   The immigration categories are very rigid…but if you appear on the surface to tick the boxes, is more investigation carried out?

Can we afford to be choosy about our immigrants?

One point up for debate (and Bernard plunges right into it) is to what exent New Zealand can be picky and choosy, when the economy is in dire straits, and an overseas migrant comes along with $10 million to invest.  Got a hundred of them a year (yes I know the real number is abysmally south of this)?  That’s a billion dollars into the economy, and most would spend more than just the basic investment, especially if becoming long term residents and later citizens.

Having said that….investing in NZ bonds?  When they can so easily be liquidated later on?  How about something a little more….well….”tangible” and directed?  There are other categories, for example, where immigrants have to set out their planning to invest in a business, or invest in property (development or investment), in varying amounts of money and with or without a command of English.  As far as English goes (or doesn’t go, as the case may be), if they’re of good character and have in excess of $10M sloshing around they’re unlikely to be much a drain on the economy no matter how non-existent their English is.  A hundred Chinese speaking multi-millionaires a year wouldn’t make a ripple culturally – they’ll mind their own business, while their children or grandchildren will grow up largely dinkum Kiwis – but can do a lot of good, especially in our ailing construction sector.

On the other hand, says Bernard:

The risk here is that New Zealand’s desperation to tempt wealthy immigrants to call New Zealand home (and invest here) is simply encouraging them to launder their ill gotten gains through the New Zealand government’s accounts. That’s one way to finance a deficit, but I can think of better ways.

It’s good to see the Overseas Investment Office (OIO) taking its time to research the potential purchasers of land. It eventually rejected a bid by May Wang and her associates at Natural Dairy for Crafar Farms last year because she failed the good character tests. Subsequently, she was charged with fraud by the Serious Fraud Office. Good.

The OIO’s caution about Shanghai Pengxin’s bid for Crafar Farms should also be welcomed. China Merchants Bank and Bain and Co published a report in April last year showing that more than half of China’s millionaires wanted to emigrate to protect their often recently (and shadily) acquired wealth from reposession by China’s government. See an AP report on that here and a WSJ report on that here.

Trying to unravel where wealthy migrants have obtained their money is never easy and unfortunately New Zealand is acquiring a reputation as something of a soft touch, thanks to the exploits of Kim Dotcom and others.

The last paragraph tends to negate the first three in my lawyer’s mindset – I’m not sure the guilty until proven innocent tactic should be encouraged….but then again this is immigration.  It’s a privilege, not a right.  Incidentally, you can see the just released OIO recommendations on the Crafar Farms acquisition here.

Bernard continues:

Back in September last year Gareth Vaughan reported here on Simon Power’s revelations via a Cabinet paper that 143 New Zealand registered companies had been implicated in criminal activities overseas including money laundering and tax fraud.

Later that month Gareth reported on the Reserve Bank’s comments that at least 1,000 shell companies registered in New Zealand had been used to carry out fraud.

No smoke without fire?  Well, perhaps.  It does argue for more stringent checking of monetary transfers in and out of the country, but it is unclear from the above what it has to do with immigration, since the examples given thereafter in Bernard’s opinion piece seem to be more about local stooges acting as a front for people overseas, not immigrants as such.

None of that is to take away from the fact that better checking, of the type that the OIO seems to be carrying out, could find a welcome home at the Immigration Service.  I  my opinion what we need is broader categories combined with more checking of people otherwise ticking the boxes, rather than narrow categories but arguably (certainly in the present case) inadequate oversight.

Whether Immigration have got the resources to investigate the more moneyed prospective immigrant is another question….but I guess paying for the background check could be part of the process.  If you’ve got $10M presumbly you won’t miss a few thousand more.

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About Ivan McIntosh

I am a partner of Carter Atmore Law...residing in City Road just off the busy thoroughfare of Symonds Street, Auckland, New Zealand....where we are specialist business & property development lawyers, working for both local and international clients. Proud husband to Joanna, and dad to two sons. Passionate rugby supporter. Email: imcintosh@calaw.co.nz Ph: 64 9 921 5026
This entry was posted in Criminal Law, Immigration Law, Litigation, Politics, Property Law and tagged , , , . Bookmark the permalink.

One Response to Kim Dotcom – The case against…

  1. Jon Miller says:

    Nice writing style. I look forward to reading more in the future.

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