Kim Schmitz
Encyclopedia
Kim Schmitz also known as Kimble and Kim Dotcom, is a German computer criminal
and businessman who has generated much publicity and was convicted of credit card fraud
, computer fraud
, insider trading
, and embezzlement
. Schmitz is also one of the leaders of the website Megaupload
.
, Germany.
In 1998 Schmitz was sentenced to a probationary sentence of two years for computer fraud and handling with stolen goods. According to a report by News & Record he had traded with stolen calling card numbers he bought from hackers in the United States.
Rheinland". In 2001 TÜV Data Protect went bankrupt.
Schmitz had also arranged and obtained an unsecured loan of EUR 280,000 from Monkey AG, a company that Schmitz had served as Chairman of the Board. The funds were to be paid to Kimvestor AG. As a result, both Monkey and Kimvestor went bankrupt.
In January 2002, Schmitz was arrested in Bangkok
, Thailand
, deported to Germany, and sentenced to a probationary sentence of one year and eight months, and a EUR 100,000 fine, the largest insider-trading case in Germany at the time. Schmitz also pleaded guilty to embezzlement
in November 2003 and received a two-year probation
sentence.
to maximize investment return and Schmitz tried to find investors for a hedge fund
managed by the company. According to media reports Schmitz never had a proper licence to start the fund.
New Zealand media reported that Schmitz bought a NZ$30M mansion just outside Auckland; the previous owners were Richard and Ruth Bradley, the British founders of the Chrisco, and the house was described as the most expensive house in the country. According to a spokesman from Megaupload, he was granted permanent residency in New Zealand.
An investigative piece found Schmitz in Hong Kong business records with the new name "Kim Tim Jim Vestor", allegedly having a Finnish passport, acting as director of several "Mega-" companies, among them Megaupload Ltd. and Megarotic Ltd.
He was sued for copyright infringement as owner of Megaupload., later on a settlement was filed.
Hacker (computer security)
In computer security and everyday language, a hacker is someone who breaks into computers and computer networks. Hackers may be motivated by a multitude of reasons, including profit, protest, or because of the challenge...
and businessman who has generated much publicity and was convicted of credit card fraud
Credit card fraud
Credit card fraud is a wide-ranging term for theft and fraud committed using a credit card or any similar payment mechanism as a fraudulent source of funds in a transaction. The purpose may be to obtain goods without paying, or to obtain unauthorized funds from an account. Credit card fraud is also...
, computer fraud
Computer crime
Computer crime, or cybercrime, refers to any crime that involves a computer and a network. The computer may have been used in the commission of a crime, or it may be the target. Netcrime refers to criminal exploitation of the Internet. Such crimes may threaten a nation’s security and financial health...
, insider trading
Insider trading
Insider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
, and embezzlement
Embezzlement
Embezzlement is the act of dishonestly appropriating or secreting assets by one or more individuals to whom such assets have been entrusted....
. Schmitz is also one of the leaders of the website Megaupload
Megaupload
Megaupload is an online Hong Kong-based company established in 2005 for the use of uploading and downloading files. It includes a video browsing section in the site Megavideo, MegaLive, MegaPix and Megabox as well as a sister company called Megaporn which hosts user uploaded pornographic content...
.
Early career
Schmitz was born in KielKiel
Kiel is the capital and most populous city in the northern German state of Schleswig-Holstein, with a population of 238,049 .Kiel is approximately north of Hamburg. Due to its geographic location in the north of Germany, the southeast of the Jutland peninsula, and the southwestern shore of the...
, Germany.
In 1998 Schmitz was sentenced to a probationary sentence of two years for computer fraud and handling with stolen goods. According to a report by News & Record he had traded with stolen calling card numbers he bought from hackers in the United States.
DataProtect
In 1994 Schmitz founded a computer security company called DataProtect. In 1999 DataProtect and IVM engineering presented the "Megacar", a version of a Mercedes-Benz which combined 16 GSM modules to provide mobile broadband internet access. In 2000 Schmitz sold 80 percent of the shares of DataProtect to "TÜVTechnischer Überwachungsverein
TÜVs are German organizations that work to validate the safety of products of all kinds to protect humans and the environment against hazards. As independent consultants, they examine plants, motor vehicles, energy installations, devices and products TÜVs (short for Technischer...
Rheinland". In 2001 TÜV Data Protect went bankrupt.
Insider trading and embezzlement
In 2001, Schmitz purchased $375,000 worth of shares of the nearly bankrupt company LetsBuyIt.com and subsequently announced his intention of investing EUR 50 million in the company. Unknown to others, Schmitz did not have the funds available for purchase, although the announcement caused the share value of LetsBuyIt.com to jump by nearly 300%. Schmitz quickly sold the shares and profited $1.5 million as a result.Schmitz had also arranged and obtained an unsecured loan of EUR 280,000 from Monkey AG, a company that Schmitz had served as Chairman of the Board. The funds were to be paid to Kimvestor AG. As a result, both Monkey and Kimvestor went bankrupt.
In January 2002, Schmitz was arrested in Bangkok
Bangkok
Bangkok is the capital and largest urban area city in Thailand. It is known in Thai as Krung Thep Maha Nakhon or simply Krung Thep , meaning "city of angels." The full name of Bangkok is Krung Thep Mahanakhon Amon Rattanakosin Mahintharayutthaya Mahadilok Phop Noppharat Ratchathani Burirom...
, Thailand
Thailand
Thailand , officially the Kingdom of Thailand , formerly known as Siam , is a country located at the centre of the Indochina peninsula and Southeast Asia. It is bordered to the north by Burma and Laos, to the east by Laos and Cambodia, to the south by the Gulf of Thailand and Malaysia, and to the...
, deported to Germany, and sentenced to a probationary sentence of one year and eight months, and a EUR 100,000 fine, the largest insider-trading case in Germany at the time. Schmitz also pleaded guilty to embezzlement
Embezzlement
Embezzlement is the act of dishonestly appropriating or secreting assets by one or more individuals to whom such assets have been entrusted....
in November 2003 and received a two-year probation
Probation
Probation literally means testing of behaviour or abilities. In a legal sense, an offender on probation is ordered to follow certain conditions set forth by the court, often under the supervision of a probation officer...
sentence.
Other activities
Since 2001, Schmitz has had media coverage as a founder of a Hong Kong based investing company called Trendax. The company claimed to use artificial intelligenceArtificial intelligence
Artificial intelligence is the intelligence of machines and the branch of computer science that aims to create it. AI textbooks define the field as "the study and design of intelligent agents" where an intelligent agent is a system that perceives its environment and takes actions that maximize its...
to maximize investment return and Schmitz tried to find investors for a hedge fund
Hedge fund
A hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...
managed by the company. According to media reports Schmitz never had a proper licence to start the fund.
New Zealand media reported that Schmitz bought a NZ$30M mansion just outside Auckland; the previous owners were Richard and Ruth Bradley, the British founders of the Chrisco, and the house was described as the most expensive house in the country. According to a spokesman from Megaupload, he was granted permanent residency in New Zealand.
An investigative piece found Schmitz in Hong Kong business records with the new name "Kim Tim Jim Vestor", allegedly having a Finnish passport, acting as director of several "Mega-" companies, among them Megaupload Ltd. and Megarotic Ltd.
He was sued for copyright infringement as owner of Megaupload., later on a settlement was filed.