LAWYER SAYS  

Dotcom's New Zealand lawyer Davison said in court that Megaupload's business was being misrepresented and authorities were being aggressive to add drama to the case.

"His business did not reproduce or copy material as alleged," he told the court, adding that copyright holders had been given access to Megaupload to identify improper posting of material. He likened the site to the popular YouTube video site, where people "promoted their creativity".

In New Zealand, questions are being asked about how Dotcom, who moved to the country in 2010, could be given permanent residency under a business investor scheme despite criminal convictions for insider trading.

Prime Minister John Key said Dotcom's criminal past had prevented him buying the NZ$30 million mansion and 20 hectare property because he was not a "person of good character".

However, he said immigration authorities took into account the wiping of Dotcom's criminal record under Germany's 'clean-slate' laws.

LAVISH LIFESTYLE

A legal expert said extradition arrangements between New Zealand and the United States were reasonably straightforward and standard, but there were some important factors.

"The offence for which extradition is sought must be an offence in the jurisdictions of both states," said Otago University law professor Kevin Dawkins, adding that an accused must be tried on the offence for which they are extradited.

New details emerged about Dotcom's lavish lifestyle and tastes, with reports that he had a heated lap pool built just off the master ensuite, with underwater speakers, imported spring water and a custom ladder worth around NZ$15,000.

"It's insane, and it gets more insane inside. When we were there we called it 'extreme home makeover, millionaire edition'," a source close to the teams that did renovation work the New Zealand Herald.

The anonymous source said other features inside the house included a graffiti-style painting depicting Dotcom and his wife, Mona, on the wall of one room, which also had about seven 60-inch television screens - each with its own X-box and luxury, recliner chair.

A film posted on the Internet shows Dotcom, surrounded by topless women and men spraying champagne on board a superyacht during a "crazy weekend" in Monaco reported to have cost $10 million.

"Fast cars, hot girls, superyachts and amazing parties. Decadence rules," said the commentary accompanying the so-called fun documentary, which Dotcom dedicated to "all my fans".

The FBI estimates that Dotcom personally made around $115,000 a day during 2010 from his empire. The list of property to be seized, includes nearly 20 luxury cars, one of them a pink Cadillac, works of art, and NZ$10 million invested in local finance companies. ($1 = 1.2433 New Zealand dollars)