Billionaire Hacker Robbed Hollywood

Cloned Boy

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Content:
  • Introduction
  • First startup
  • Founded the company
  • Luxurious life
  • Capture
  • Liberation
  • Collapse
  • Conclusion

Introduction
This is Kim Smith. Billionaire, hacker, DJ and creator of the now defunct MegaUpload. The largest cloud storage service in the world, as of late 2011. After creating MegaUpload, Kim was persecuted by the American intelligence services. To the point that it was only a matter of time before his mansion in New Zealand was raided by helicopters and special agents. Kim Smith was born in 1974 in Germany and did not have a very happy childhood.

His father was an alcoholic and often beat him and his mother. They did not have enough food. That's when Kim wanted to get rich when he grew up. He did not do very well in school and had to repeat a year. In his own words, he was a difficult teenager and was often sent to a psychologist at school. "They often sent me to the school psychologist. He said that I should not behave like this. One day I stole his wallet and my friends and I spent all the money on ice cream. When he was 11, he asked his mother for a really powerful computer.

It was a Commodore 64, which had 64 kilobytes of RAM. And then Kim started learning to program and work on the Internet. In 1991, he started participating in programming festivals. Kim was also attracted to the world of hacking and cybersecurity. He learned that American bank switches mostly had answering machines with hidden administrator access, and most of them had default passwords. He got information and access to the phones used by banks to call customers.

This included not only the numbers, but also the ability to make calls from these numbers from home.

First Startup
And so, at the age of 15, Kim came up with the idea for his first startup. He bought a phone line in the Netherlands Antilles and created his own call center - a chargeback system. American bank customers would call Kim at a call center, and only then would he connect them to their banks. Using a chargeback system, he earned 20 cents per minute from each call, and within two years he had accumulated a sum of 5,000. This type of fraud is called phreaking.

He was discovered after 2 years and placed in a temporary detention center for minors. He was charged with computer fraud and espionage, but the judge gave him only 3 months, citing childish stupidity. That is, due to his age, the defendant did not understand that this was not worth doing. Kim says that while he was in prison, executives from various telephone companies came to him to ask how he managed to pull off such a robbery for so long. This trick brought him fame, and Kim decided to take advantage of this opportunity, but from the white side.

Founded a company
He founded Data Protect, a company that does white hat hacking. He made millions by finding computer vulnerabilities on companies' servers or websites and then showing how to fix them. He also created his own website, Kimball.org, where he bragged about his lifestyle by uploading photos of travel, parties, expensive cars, helicopters, and photos with celebrities. At a time when no one had thought about the possibility of connecting a car and a computer, Kim created megacar.com, a real-time video conference broadcast from a car.

Kim patented and sold all the developments he had been thinking about for a long time. My classmates wanted to be firefighters and garbage collectors. Typical childhood dreams. And I wanted to be a millionaire. In January 2011, Kim publicly announced that he was going to invest all his funds in the Let's Buy It e-marketplace, a European analogue of Amazon.

At the end of the year, the share price of this resource jumped sharply, and Kim sold his stake and earned several million dollars more. Afterwards, he went on holiday to Thailand, and then the German government brought an insider trading case against him. Insider trading is illegal when valuable information about a company has not yet been made public. It carries serious consequences, including large fines and prison terms. Kim returned to Germany to stand trial in Germany, and after five months of waiting, the court found him guilty.

Kim received a suspended sentence of 20 months, plus a fine of 100,000 euros. It all ended rather bitterly for Kim, but his story makes you think about the choices we make in life and the importance of using your skills for good.

The Luxurious Life
By the age of 26, Kim was already a dollar millionaire. He lived the luxe life, buying up houses, yachts and cars.

He also enjoyed racing his Mercedes Brabus in the Gumball 3000. The whole point of the race was to drive your supercar 3,000 miles on public roads. There are about 120 vehicles participating, the race lasts 6 days. All fines and accommodation are paid by the participants themselves. In 2018, a ticket to participate cost 5 million rubles. He loved recording videos from these races and sharing them with friends, but he didn’t like that the videos were too big to send by email.

And he came up with a great business idea that could make him even richer and more famous. Kim buys the domain kim.Com, which is where the name the whole world knows him by comes from. He decides to create a site where you can upload any file and then just send a link to it. No matter how big it is, people will just download it and the problem is solved. This is how MegaUpload was created in 2005.

Kim uploaded his racing videos to share with his friends. He created the entire architecture of the site and servers together with his friends, who he had since his teenage hacker days. Users themselves started uploading and downloading all sorts of files. The site was an unexpected success. And it was a real paradise where you could find anything. From copies of your favorite artists to GTA San Andreas or Need for Speed. Kim immediately figured out how to monetize it.

And we are not talking only about advertising, but also about a premium subscription. If you did not pay, then you had a download limit. Your download speed was slower and you had to wait a little longer. As more and more users joined Mega Upload from all over the world, more and more copyrighted content appeared. The platform became a pirate site, and to avoid legal problems, Mega Upload was registered in Hong Kong. In 2010, the platform brought in tens of millions of dollars.

Every day, about 50 million people visit his platform. And Kim, along with his wife, receives a residence permit in New Zealand for investing 10 million dollars in the country. There, he buys a mansion on the outskirts of Auckland. In December 2010, he spends half a million dollars on fireworks to celebrate the New Year and thank New Zealand for granting him a residence permit. By the way, this was his very first video on the YouTube channel. Kim had a plan, he decided to take the company public and, according to his calculations, this project was worth 2 billion dollars.

The site already attracts millions of users and it seemed that Kim would finally live a quiet life, but in the United States, as usual, they are unhappy. The American Association of Motion Picture Companies and the Association of the Music Industry were not at all happy with the spread of pirated content. Megauplot was an imitator of existing pirate sites, so there was nothing new in what they did, they just did it better, surpassing previous pirates.

The commercial featured such famous singers as P.D. Dee, Kanye West, Snoop Dogg, Alicia Keys, Kim Kardashian, Chris Brown and Floyd Mayweather, and was viewed 15 million times. The entertainment industry has long viewed the mega-apple as its enemy. And this industry has enormous political influence in the United States. Chris Dott, the head of the Motion Picture Association of America, the most powerful man in Hollywood, told Fox News that the industry intends to stop financially supporting the president.

He made it clear to Obama that if you don’t give us what we want, you can’t expect us to help you finance your election campaign. Hollywood actually pressured the president and the government to shut down the pirate site DotCom.

Takeover
January 20, the day before Kim's birthday. New Zealand police, along with the US FBI, began storming the mansion from all sides. The original CCTV video captures the events at Dotcom's mansion, starting at 6am.

The footage shows two police vans and three patrol cars approaching the mansion. Kim was awakened by the sound of a helicopter. He thought it was his helicopter, and he was angry because he had told the pilot hundreds of times not to land so close to the mansion. Of course, it was not his helicopter, but a police one. Police helicopter recording. Broadcasting an order to the ground team to take up position at the gate of the mansion. Two agents jump over the fence, one of them quickly runs up to the guard, puts his hands behind his back and leads him into a police van.

A helicopter lands on the lawn in front of the house. A group of armed agents jump out of it, who run into the house through the main entrance. The radio broadcasts the negotiations of the capture team. We are in the house. We approached the target's bedroom. The door was slammed shut. It had a combination lock. We see a woman and children on the roof of the garage. We have located the target. Security room, third floor. Confirm the presence of the target. Kim was tried in the North Shore District Court of New Zealand.

He and his team were arrested on charges of infringing US copyright, money laundering and extortion. In New Zealand, the court seized Dotcom's luxury vehicles worth $6 million. They seized more than $10 million in cash. More details of the raid soon emerged. Police said that when they arrived in two helicopters, Dotcom locked himself in a security room with electronic locks on the doors. When the doors were forced open, they found Kim clutching a sawed-off shotgun.

The court charged Kim with possessing an illegal firearm in a loaded condition in the mansion. Given the gravity of the charges, the court refused to release him on bail. According to the FBI reports, which were presented in court during the reading of the list of charges, Kim Dotcom earned $175 million from criminal operations. All 65 bank accounts around the world were frozen. He caused half a billion dollars in damage to copyright holders.
According to Kim, they tried to arrest him as quickly as possible so that he could not use any device to destroy evidence. In reality, it took them as much as 15 minutes to find Dotcom in his own mansion.

Release
The court was supposed to continue considering the case and, at the urgent request of the US authorities, decide on the extradition of Kim and his accomplices, each of whom was threatened with a prison term of 80 years by the American justice. After spending 31 days behind bars, Kim finally managed to get out, posting bail. The judge ruled that the raids and searches were illegal.

The judge asks Inspector Grand, “So you were acting on information provided to you by FBI agents in the US?” He replies, “Yes.” The FBI and the US Department of Justice were involved in this case from the very beginning, but what’s surprising is how much the New Zealand authorities decided to trust the inside information they received from the FBI. The raid was carried out with such enthusiasm, as if the police were looking for a car in the mansion that, if activated, would destroy evidence of crimes all over the world.

Thanks to his lawyers, he was able to release some of his property from seizure and sell nine of his cars to pay off those same lawyers. Kim tells the film crew that when they were arrested and the charges were read out, he just laughed. “They sounded so absurd. I knew we were innocent. We had not committed any of the crimes we were accused of. I told my lawyers that this would be over very quickly. He assured the lawyers that proving the innocence of the MegaUpload founders would be very easy.

While in custody, Kim looked through the newspapers full of articles about his arrest, his person and his luxurious life. They said he had resisted arrest with a sawed-off shotgun and that many unregistered weapons had been found in his house. Kim was surprised at how far from the truth this was. The irony is that by calling me a pirate, the American government itself would steal everyone’s personal information. They monitor all your communications.

Hollywood could force the White House to turn against a man who wanted to make the world a simpler place using military tactics. But all this did not reduce the level of piracy. People began to feel that the state machine had taken over Dotcom illegally and unfairly. New Zealanders suddenly saw that there were two sides to the story. And perhaps this was simply the United States attacking someone who had become a liability to Hollywood. Kim became a national hero. On the street, he was mobbed by young people who asked him for autographs and shouted, “Kim, we love you!”

City buses adorned with Dotcom's face were running through the streets of Oakland. People wanted to fight injustice, and suddenly the world knew who Kim Dotcom was.

MegaUpload
was shut down on January 19, 2012, by order of the US Department of Justice. In response to its closure, the hacker group Anonymous temporarily disabled the websites of the US Department of Justice, the FBI, and several film and music industry resources, including Universal Music.

On January 19, 2013, on the anniversary of MegaUpload's closure, Kima.Coma's new site, Mega, was launched. The Mega Upload scandal created such a buzz around Mega that the site couldn't even withstand the influx of visitors in the first hours. Just 14 hours after its launch, the resource had been visited by a million people, half of whom immediately registered on the site. Mega, like Mega Upload, allows you to upload, store and share large files. The difference between them is that Mega encrypts all content directly in the browser using a special algorithm.

Users can transfer encrypted files to each other. All data is stored in the cloud. Access keys to files are not published in the public domain, but are distributed using the Friend-to-Friend scheme between users who trust each other. Dotcom also promises film studios and record companies the ability to delete files they don't like using a simplified procedure if they sign an agreement guaranteeing a waiver of claims against the service itself.

Conclusion
In August 2024, a New Zealand court ordered Dotcom's extradition to the United States, where he was charged with 13 counts. The legal battle with the New Zealand authorities lasted more than 12 years. There was even a movie based on this story. The story of Kim Dotcom is a complex story of a pirate, a hacker, and an activist. For some, he is a hero, and for others, a villain who breaks the law. Of course, there are people who do not understand why it is worth buying games when they can be downloaded for free.

Their point of view is also understandable. Ultimately, the court will decide everything, and we will watch how things develop. Be sure to forward this thread to your friends who consider themselves digital pirates. Like, write a comment and bye!
 
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