Dotcom Reveals Megaupload Data Massacre Emails, Plans to Sue LeaseWeb

• Ernesto
• June 26, 2013
• leaseweb,
  MegaUpload

Kim Dotcom and his legal team have published an email revealing that they asked LeaseWeb to preserve the data stored on 630 servers that were recently wiped. The email contradicts an earlier statement from the hosting company which claimed that for a year nobody showed interest in the servers. Adding to the controversy, Dotcom informs TorrentFreak that his legal team is contemplating litigation against the former host over their actions.
Last week news broke that Megaupload’s former hosting provider LeaseWeb had deleted all Megaupload data from 630 servers without warning.
Petabytes of user data and backups, mostly from European users, were permanently deleted and the servers were re-provisioned to other customers. Kim Dotcom was outraged by the scandal and said Megaupload specifically requested that the host should preserve the data.
“They deleted petabytes of data in the face of Megaupload’s data preservation notices. Our legal team asked them multiple times not to delete the data while the U.S. court is deciding the pending cases including the rights of our users,” he said.
LeaseWeb counsel Alex de Joode disputed Dotcom’s account of the events, and the company released a statement explaining their actions. According to de Joode, Megaupload showed no interest in the data at all.
“During the year we stored the servers and the data, we received no request for access or any request to retain the data. After a year of nobody showing any interest in the servers and data we considered our options. We did inform Megaupload about our decision to re-provision the servers,” the counsel wrote.
“As no response was received, we commenced the re-provisioning of the servers in February 2013. To minimize security risks and maximize the privacy of our clients, it is a standard procedure at LeaseWeb to completely clean servers before they are offered to any new customer.”
Both sides clearly have different versions of the truth, but who is right? To back up his claims Kim Dotcom decided to share one of the date preservation request emails that Megaupload’s legal counsel sent to LeaseWeb during March 2012, less than a year before the data was deleted, and a similar request from EFF dated April 2012.
“LeaseWeb declined receiving data preservation requests regarding Megaupload servers and here is the proof that they did receive them on several occasions from EFF and the Megaupload legal team,” Dotcom informs TorrentFreak today.
“Megaupload continues to request that LeaseWeb preserve any and all information, documentation and data related to Megaupload – as destruction by LeaseWeb would appear to be in violation of amongst other things the applicable civil litigation data preservation rules and would interfere with evidence in a criminal matter[...],” Megaupload’s counsel Ira Rothken explains in the letter.
The email adds that “In addition, the Mega data on the servers at Leaseweb contain private and sensitive customer data and is subject to applicable privacy and data retention laws. Megaupload is negotiating with the United States to discern feasibility of consumer data access and the conditions for the same.”
The letter goes on to state that Megaupload is trying to get permission and funds to take over the servers from LeaseWeb, as it tried to do with US-based hosting company Carpathia last year.
“Megaupload would like to try to negotiate an amicable solution to the above legal conundrum with LeaseWeb via a purchase of the servers storing the Mega data and future payments amongst other things – similar to an agreement recently signed by Mega with Carpathia in the US.”
The EFF, who are representing a Megaupload user in the U.S. court case, made a similar preservation request to LeaseWeb USA in April, asking the company not to delete any data.
“We now write to formally request that you preserve that material both for purposes of contemplated future litigation and as a matter of obligation and courtesy to the innocent individuals whose materials have unfortunately been swept up into this case,” the EFF letter reads.
From the above it’s clear that LeaseWeb’s public statement contradicts the data preservation correspondence above, and that despite these requests LeaseWeb decided to wipe the data and re-provision the servers. But there’s more.
Adding to the controversy, Kim Dotcom today informed TorrentFreak that they have additional information the legal team is analyzing relevant to whether LeaseWeb violated the law. The new information allegedly shows that LeaseWeb may have broken applicable law in their handling of the servers after the raid.
“I can tell you that we are contemplating legal action against LeaseWeb,” Dotcom says.
While it’s clear that LeaseWeb’s initial statement in response to the data deletion was not correct, at this point it is impossible for us to report on the basis of the potential legal action. Dotcom says he will reveal more on that later.
LeaseWeb, meanwhile, maintains that it has done nothing wrong. The company operates under Dutch law and says it had no obligation whatsoever to preserve the data any longer than it did. In addition, the company says it informed Megaupload about the re-provisioning in January 2013. It further claims that it never received a lawful proposal to acquire the dedicated servers, as Megaupload suggested in their email.
Responding to LeaseWeb’s claim, Dotcom reveals that in April 2012 the Australian domain registrar INSTRA contacted the hosting company with a proposal to buy the Megaupload servers, to preserve them for later use. However, LeaseWeb allegedly refused to negotiate with the company, who are now one of the main investors in Megaupload’s successor Mega.
Regarding the email about the re-provisioning that Leaseweb says it sent in January, Megaupload’s counsel Ira Rothken informed us that he has no record of ever receiving it.
“Leaseweb was put on written notice repeatedly to preserve data relevant to both pending criminal and civil litigation, including potential civil litigation involving Leaseweb, whether one couches it in terms of e-discovery litigation holds or just being a good corporate citizen we believe that Leaseweb acted inappropriately under the circumstances when they destroyed data,” Rothken tells TorrentFreak.
“If they were really concerned about money they could have backed the data up to tape and made a minimal claim for reimbursement against the millions of dollars in Megaupload’s frozen assets.”
“Ultimately we blame the United States who exercised constructive control over Megaupload’s assets and who had the obligation, resources, and ability to preserve all relevant and exonerating evidence including the data located at Leaseweb and failed to do so,” Rothken adds.
It’s clear that Dotcom, who is still outraged and saddened by the mass data deletion, is determined to get to the bottom of the issue. He hopes that through a court proceeding the truth will eventually come out.
To be continued.
Update: Leaseweb issued a public response stating the Megaupload’s request was made before the servers were stored.
“The MegaUpload request was part of a larger discussion while the servers were still racked. On March 29, 2012 the servers were stored and preserved, the initial MegaUpload request pre-dates this. I see therefor no discrepancy between our statement and the facts,” the company states.