Now he is confined to his home, has refused through his lawyers to grant interviews, and is forbidden to log on to the Internet.
Born Kim Schmitz in the German coastal town of Kiel, Dotcom grew up with an alcoholic father. As a teen, he created a mystique for himself that led the Sunday Telegraph of London to call him a "superhacker."
German hackers interviewed by the AP, however, say he did little of what he claimed.
"He was trying to make half a buck on every occasion offered him," said Dirk Engling, spokesman for the Chaos Computer Club, which eventually banned Schmitz from attending any of their events. "Not having some real skills of his own, he was always using other people's inventions to attack systems and then claim he did it."
Engling said Schmitz ended up putting club members in legal jeopardy through his recklessness, but some wanted to work with him anyway because he radiated the social ease they lacked.
One of his first schemes, according to Engling, was selling pirated software from an online mailbox.
In 1998, a Munich court convicted Schmitz and an accomplice of computer fraud and of buying and selling stolen phone cards. They got off with a fine and probation for what the judge called "youthful foolishness." Schmitz came to court wearing a black suit and sunglasses, saying he loved "feeling like a spy."