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Schmitz was born in 1974 in Kiel, Germany, and grew up in northern Germany. His father piloted the luxury cruise liner “MS Deutschland.” His mother was a chef. He attended a posh boarding school, the Staatliche Internat Schloss Plön, and got his first computer when he was nine. Because gaming software cost too much for him to buy, he figured out how to make illegal copies and went into business selling them to friends for a few marks a piece.
Three years later, well before the World Wide Web was available to everyone, Schmitz used 12 telephone lines to hack into other computers. The jumbled mass of cables in his room, however, failed to send off any alarm bells. “My parents had no idea what was going on,” he would say later. “To them it was all just a bunch of blinking little lights.”
During the Gulf War, Schmitz broke into the U.S. Defense Department’s computer system and, according to him, “found some servers with real time connections to spy satellites” monitoring Saddam Hussein’s palace. A BBC report says that Schmitz also succeeded in hacking the account of former German Chancellor Helmut Kohl. He reportedly changed Kohl’s credit limit to zero.
Early one morning in 1994, Schmitz got a visit: Munich police raided his apartment. Then 20 years of age, he was held in custody for three months prior to legal proceedings, but then got off with a two-year suspended sentence.
After that slap on the wrist, things went well for Schmitz. Companies courted him, vying with each other to get him on board as a security consultant. Just a week after his release he landed a contract with Lufthansa. He ended up creating a data protection company called DataProtect, 80% of which he was able to sell to the technical monitoring entity TÜV Rheinland before it went bankrupt soon thereafter.
At the time of his latest arrest, Schmitz was living in a $30-million mansion near Auckland. The Coatesville estate was one of the most expensive in the country. He had originally intended to buy it, but some politicians put up resistance to this and in the end Kim Dotcom ended up renting. But he did get a residence permit – apparently after buying $10 million worth of government bonds and giving generously to funds collected for victims of the Christchurch earthquake. For the New Year, he donated the money for a huge fireworks display in the harbor. That made New Zealanders happy, and enabled him to feel like the great philanthropist.
When he was arrested last Thursday, police took possession of objects including paintings and a Rolls Royce Phantom, and money adding up to a total of approximately 3.7 million euros. According to U.S. authorities, Megaupload made more than $175 million in illegal profits and owes damages to the legal owners of the stolen content totaling well over $500 million.
And yet Schmitz received support from a number of stars, including singers Alicia Keys and Kanye West, probably because he had promised that they would each get 90% of earnings on their respective content. In late 2011, Schmitz released a mega-successful ad video for Megaupload featuring many big stars. He himself is also featured singing on the video.
According to the New Zealand police officer leading the arrest, Grant Wormald, when Schmitz realized the police had arrived he tried to hide in a special high-security room inside the mansion and “activated a series of electronic locking systems.“ After police had “neutralized” him, he tried to barricade himself in the space. Police had to cut their way through the obstacles. "We found Mr. Dotcom in the room near a weapon that looked like a sawed off shotgun."
Megaupload has been taken offline and Schmitz himself may now be out of circulation for some time. If convicted of organized exchange of illegally copied data he could be looking at up to 20 years in prison. Not such a mega outcome
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