A day after the Internet was abuzz with protests of the proposed SOPA and PIPA anti-piracy bills, the Department of Justice took a major action against many of the top executives of Megaupload, a popular file-sharing site that the government says was the basis for an “international organized criminal enterprise allegedly responsible for massive worldwide online piracy of numerous types of copyrighted works”. Prosecutors revealed indictments against seven people, all of whom are foreign nationals, as part of the case. As a result of the indictments and shutdown of Megaupload, Anonymous retaliated with a series of DDoS attacks against sites owned by Justice, Universal Music and the Motion Picture Association of America.
All of the men charged in the case were indicted in the U.S. but are citizens of other countries. The men charged in the case include Kim Dotcom, a resident of Hong Kong and New Zealand; Finn Batato, Sven Echternach and Mathias Ortmann, all of Germany; Julius Bencko of Slovakia; Andrus Nomm of Estonia; Barm van der Kolk of the Netherlands. The indictments allege that Dotcom, the founder of the company, and his associates were engaged in large-scale copyright infringment by allowing users of Megaupload to share videos, music and other media that are protected by U.S. copyright laws.
Four of the men–Dotcom, Batato, Ortmann and van der Kolk–were arrested in Auckland, New Zealand, Thursday and appeared in court there Friday morning. The others have not yet been found, Justice officials said. As part of the operation, law enforcement officials in the U.S. and several foreign countries served a series of search warrants that resulted in the seizure of what the Justice Department estimated as $50 million in assets belonging to company or the indicted executives.
“According to the indictment, for more than five years the conspiracy has operated websites that unlawfully reproduce and distribute infringing copies of copyrighted works, including movies – often before their theatrical release – music, television programs, electronic books, and business and entertainment software on a massive scale. The conspirators’ content hosting site, Megaupload.com, is advertised as having more than one billion visits to the site, more than 150 million registered users, 50 million daily visitors and accounting for four percent of the total traffic on the Internet,” Justice Department officials said in a statement.
The indictment alleges that the defendants failed to terminate the accounts of users who uploaded infringing content and only selectively complied with orders to remove that content from their servers when they were notified of an infringement.
The Megaupload site is currently offline and within minutes of the announcements of the indictments and shutdown of the site Thursday, members of Anonymous launched a DDoS attack against one of the Justice Department’s sites, as well as sites run by the Univeral Music Group, Recording Industry Association of America and MPAA. The RIAA and MPAA have been vocal supporters of the SOPA anti-piracy bill, which has been the target of widespread protests and criticism this week. A large number of sites, including Wikipedia, went dark on Wednesday in protest against the strict measures in the proposed bill.
Megaupload is based in Hong Kong, but has servers in several places, including Virginia, where the case against the executives is being prosecuted. The men were indicted on Jan. 5 in Virginia, and have been charged with engaging in a racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering and two substantive counts of criminal copyright infringement.
Dotcom, the founder of Megaupload, has gone by a number of names over the years, including Kimble, Kim Schmitz and others. He was arrested in Thailand and charged with insider trading in Germany in 2002 and eventually was given a fine of 100,000 euro and a suspended sentence.