Megaupload founder Kim Dotcom says he's broke after avoiding jail in New Zealand

Indicted Internet entrepreneur Kim Dotcom speaks at a political rally in Wellington, New Zealand, on Aug. 4, 2014. (AP / Nick Perry)

WELLINGTON, New Zealand -- Indicted Internet entrepreneur Kim Dotcom on Monday defeated efforts by prosecutors to send him back to a New Zealand jail or make him wear an electronic monitoring bracelet but says his long-running legal battle has left him broke.

After a three-day hearing, Auckland District Court Judge Nevin Dawson ruled there was no evidence Dotcom had secret assets or posed a flight risk, according to Fairfax Media.

U.S. and New Zealand prosecutors had sought to have Dotcom's bail revoked, arguing he might try to flee the country after earning tens of millions of dollars since his 2012 arrest. Prosecutors said he'd breached his bail conditions in several ways, including indirectly contacting a former associate.

Dawson did tighten Dotcom's bail conditions by ruling he can no longer travel by private helicopter or boat and must report to police twice a week, Fairfax reported. But the judge said it would be inappropriate to deprive Dotcom of his freedom on the evidence presented.

The German-born Dotcom is fighting attempts by U.S. prosecutors to extradite him on racketeering charges over his website Megaupload, which authorities shut down at the time of his arrest. His extradition hearing has been delayed several times and is now scheduled for June.

Prosecutors say Megaupload was used to illegally download millions of songs and movies in one of the biggest copyright cases in history. But Dotcom says he can't be held responsible for those who chose to use Megaupload for illegal downloads.

At the time of his arrest, authorities froze Dotcom's worldwide assets, which were worth over $40 million, and jailed him for a month.

But since then, Dotcom says he has earned another 40 million New Zealand dollars ($31 million) from new ventures, including the file-sharing site Mega and a music venture, Baboom.

But he also spent several million dollars on a failed political campaign and says his legal case has so far cost him more than NZ$10 million.

He told the unBound Digital conference by video link last week that he was "officially broke," which had caused his New Zealand lawyers to abandon him after working for more than two years on his case. He blamed prosecutors for his predicament.

"They have certainly managed to drain my resources, and dehydrate me, and without lawyers I'm defenceless," he told the conference.

He later clarified on Twitter that he'd paid the rent on the mansion he lives in near Auckland through mid-2015 and that he would return to court soon, seeking to have some of his frozen assets released to pay his legal fees and living expenses.