Megaupload boss Kim Dotcom (read our in-depth profile) was denied bail on Thursday by a New Zealand court. Dotcom insisted that he had no desire to flee the country and merely wanted to be with his pregnant wife and their three young children. But US attorneys argued the Dotcom posed a severe flight risk, and the court rejected Dotcom's bail request.

In court testimony, Dotcom described the dramatic raid on his home by law enforcement. Dotcom told the court that he didn't know the people invading his home were police officers, so he fled to a secure "panic room." Once he realized they were police officers, he decided to stay where he was rather than risk surprising officers and getting shot.

Wayne Tempero, Dotcom's security chief, who is facing charges over weapons found during the raid, backed up Dotcom's story. "Not once did they say they were police," he testified. "They had civilian clothes on. The only things that I saw were flack jackets with a lot of pistols and automatic weapons."

"When somebody's pointing an automatic weapon at you and tells you to get on the ground, you get on the ground," Tempero told the court.

Dotcom charged that the police used excessive force once they reached the panic room. "I was punched in the face. I was kicked down on the floor. One guy was standing on my hand so my nail was ruptured and my hand was bleeding. It was quite aggressive."

"No funds left anywhere"

The judge grilled Dotcom on whether he had cash or criminal connections that would allow him to obtain fraudulent documents and flee the country. "I want to be absolutely clear about this," Dotcom told the court. "There are no funds left anywhere. Everything has been seized." He also denied that he had any criminal associates who could help him flee the country.

"I have absolutely no desire to breach any condition that is given to me," he said. "I will not run away. I want to fight these allegations on a level playing field and have a fair chance to defend myself."

"I have three little children," Dotcom told the court. "My wife is pregnant with twins, and is due in the next two months. I just want to be with them."

But Dotcom's pleas went unheeded. He was denied bail and placed back in custody.

Speaking to reporters after the decision, Dotcom's attorney said the outcome was "very disappointing" to his client. Dotcom "believes that he has done nothing wrong in relation to the charges the US government has brought," the attorney said. "He has made a home for himself and his family here in New Zealand. He has absolutely no intention of doing other than remaining here and fighting extradition."

He said Dotcom was still considering his options. He might appeal the decision or "make a further application for bail if there are new circumstances."