After being granted bail last week, Kim Dotcom went home to spend some quality time with his family. The Megaupload founder had been in prison for little over a month after his arrest in January. Upset at the decision to grant Dotcom freedom, the US Government, argued yesterday in an appeal hearing that he should be put back in jail. Today they failed in that attempt and Dotcom remains a free man - at least for now.

On February 22nd, Megaupload founder Kim Dotcom was released on bail by North Shore District Court Judge Nevin Dawson.

Dotcom had been held in custody since an anti-terrorist police squad raided his Coatesville mansion in January following a lengthy FBI investigation.

The prosecution, acting on behalf of the US Government, argued that Dotcom had hidden resources that would enable him to flee the country should he be granted bail. Although four additional bank accounts in the Philippines were discovered, all of them were empty, and the Judge concluded that there was no evidence of significant funds elsewhere

As a result the Megaupload founder was released from prison, free to continue the fight against the US authorities who want him extradited to face racketeering, copyright infringement and money laundering charges.

When TorrentFreak spoke with Dotcom yesterday he was in high spirits but the Crown, acting on behalf of the US Government, had already appealed the decision to free the Megaupload founder.

Crown prosecutor Anne Toohey told the court yesterday that since Dotcom’s release last week two further banks accounts had been discovered – one in the Philippines and another in the British Virgin Islands containing $2000.

She said that this, along with allegations that Dotcom might have access to forged travel documents, was enough to have the 38-year-old put back in prison.

Representing Dotcom, Paul Davison QC argued that it made no sense for his client to try and flee the country, not least because his wife Mona will shortly give birth to twins.

Today Judge Tim Brewer agreed, denying the prosecution’s appeal and allowing Dotcom to remain a free man pending an extradition appeal in August.

Also in court today, Dotcom and his wife had asked for access to around NZ $220,000 (US $185,130) to cover their living costs including rent of their mansion, security guards and other household staff. The amount would also cover substantial telephone costs incurred as Dotcom prepares his defense, fuel and tutoring for Dotcom’s children.

Previously, Judge Judith Potter agreed to release NZ $74,000 from one of Dotcom’s seized bank accounts to pay creditors left out of pocket after the shutdown of his companies.

It also emerged that US authorities are now investigating Mona Dotcom on suspicion of being involved in Megaupload.