By James Murray with NZN
Proceedings at North Shore District Court have been adjourned to 2:15pm after the crown argued Megaupload founder Kim Schmitz should not be given bail, partially because he has a helicopter on his front lawn.
It has also been argued that Schmitz poses an extreme flight risk as he has multiple passports and is a citizen of several countries.
His risk of reoffending and the sheer size of this intellectual property case have also been used as reasons to not grant bail.
Judge David McNaughton raised concerns about the discovery of shotguns on Schmitz's property, and described them as an "aggravating factor to bail application".
However, Schmitz's defence says the scale of the police operation against Megaupload was unnecessarily grandiose.
They object to the way search and arrest warrants were carried out, especially where armed offenders arrived in helicopters and dropped into the Dotcom mansion courtyard.
The defence are arguing this has amplified any offending, which Schmitz denies, "beyond reality" and misrepresents the business of "uploading". They argue the arrests were made in this way to "present the most dramatic intentions" and launch the case.
They are also arguing that Schmitz would be unable to carry on the business at the centre of the charges as Megaupload has been shut down, saying he has no interest in restarting the business until this matter is resolved.
Schmitz would be seeking redress for the significant losses to his business.
His lawyers also dispute the helicopter claim saying New Zealand is too far away from other countries for it to be used to abscond. They also say it is unlikely he would be able to use a private jet, and this would be hard financially as all but one of his funds have been frozen.
He is on his own in the dock and denies any criminal conduct or the extistence of any "mega-conspiracy".
Meanwhile, there are reports Megaupload may have lost the services of high-profile defence lawyer Robert Bennett because of a conflict involving at least one other client of his law firm Hogan Lovells.
Reuters says the news comes from someone "familiar with the matter".
Mr Bennett is a highly successful defence lawyer who has represented Bill Clinton and energy company Enron.
US lawyers abide by an ethical code which generally does not allow them to represent "two clients whose interests are at odds".
Bennett had been working for Megaupload, in non-criminal matters, before the conspiracy and copyright charges were laid.
Three other men facing internet piracy charges following the FBI-led investigation to appear in North Shore District court later.
The men spent the weekend in jail, after they were arrested in Auckland on Friday.
Police raided the rented Auckland mansion of Kim Dotcom, also known as Kim Schmitz, who founded internet upload site www.megaupload.com.
He is a 38-year-old German national with New Zealand residency.
Questions have been raised about how he was granted residency, with New Zealand First leader Winston Peters calling for an immigration inquiry.
Warwick Tuck, head of immigration, said Dotcom was granted residency under the investor plus category, which allows people to gain residency if they invest $10 million in New Zealand.
Mr Tuck says his previous convictions were disclosed and had been considered.
Dotcom and the other accused appeared on Friday in North Shore District Court, where they were remanded in custody to reappear on Monday.
The other three are Megaupload's chief marketing officer Finn Batato, 38, chief technical officer and co-founder Mathias Ortmann, 40, both from Germany, and Dutch national Bram van der Kolk, 29, who is also a New Zealand resident.
The men are among seven charged in the global sting. The FBI is working to extradite them to the US.
3 News / NZN