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New Zealand Agents Spied 'Unlawfully' in Kim Dotcom Case: PM

WELLINGTON - New Zealand Prime Minister John Key has ordered an inquiry into government agents spying "unlawfully" while assisting police in the lead up to the arrest of Megaupload boss Kim Dotcom.

Key said Monday he has told the Intelligence and Security department to investigate "the circumstances of unlawful interception of communications of certain individuals by the Government Communications Security Bureau".

He said a memorandum had also been filed in the High Court dealing with the Megaupload case advising that the bureau "had acted unlawfully while assisting the police" to locate people subject to arrest warrants issued in the case.

Key did not name Dotcom specifically, but said the bureau "had acquired communications in some instances without statutory authority".

Dotcom is fighting extradition to the United States after being arrested in January by New Zealand police cooperating with a major US investigation.

The US Justice Department and FBI claim Megaupload and related sites netted more than $175 million in criminal proceeds and cost copyright owners over $500 million by offering pirated copies of movies, TV shows and other content.

The 38-year-old German national, who legally changed his name from Kim Schmitz, had moved to New Zealand in early 2010 and enjoyed a lavish lifestyle until his arrest.

Key said he was "quite shocked" to learn the government secret agents had acted unlawfully.

"I expect our intelligence agencies to operate always within the law. Their operations depend on public trust," he said.

Key said he had not been asked to sign an intercept warrant in relation to the case "nor was I briefed on the operation in question" but he added he believed the incident was an isolated error.

"Because this is also a matter for the High Court in its consideration of the Megaupload litigation, I am unable to comment further."

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