The US Supreme Court has rejected New Zealand-based internet mogul Kim Dotcom's challenge to the US government's bid to seize assets held by him and others involved in the now-defunct streaming website Megaupload.
The justices left in place a lower court's ruling that the US government could seize up to US$40 million ($55.5 million) in assets held outside the United States as part of a civil forfeiture action being pursued in parallel with criminal charges for alleged copyright violations and money laundering.
Dotcom and several other defendants have contested US attempts to extradite them from New Zealand.
German-born entrepreneur Dotcom is wanted by US law enforcement authorities on copyright and money-laundering allegations related to Megaupload, which was shut down in 2012 following an FBI-ordered raid on his Auckland mansion. He was indicted the same year along with fellow Megaupload executives.
US authorities say Dotcom and his colleagues cost film studios and record companies more than US$500 million and generated more than US$175 million in profits by encouraging paying users to store and share copyrighted material including movies and TV shows.
The US government sought up to US$175 million in assets but the defendants say the assets in question are worth only around US$40 million. The assets include two houses, luxury cars and bank accounts.
A New Zealand court ruled in February that Dotcom and three other New Zealand-based defendants - Finn Batato, Mathias Ortmann and Bram van der Kolk - could be extradited to the US to face the charges.
Two other indicted Megaupload associates, Sven Echternach and Julius Bencko, who live in Germany and Slovakia respectively, have not been arrested, according to court filings.
The defendants contested the US government's forfeiture claims, saying in part that it could not seize property under the jurisdiction of a foreign court.
The US government's legal argument, adopted by the appeals court, is that the defendants are fugitives seeking to avoid criminal prosecution in the US and therefore are not allowed to contest the forfeiture.