Megaupload.com Gets Hit by Mega Piracy Indictment

http://abcnews.go.com/Technology/justice-fbi-crack-megaupload/story?id=15396526#.TxiTyJibJKM

By JASON RYAN, PIERRE THOMAS and JACK CLOHERTY

Jan. 19, 2012

The Justice Department has indicted seven individuals and two companies behind the popular file sharing website Megaupload.com which has been touted by stars will.i.am, Kim Kardashian and Puff Daddy.

The indictment alleges that the website and a shell company associated with the website, Vestor Limited, caused an estimated half-billion dollars in copyright losses and made an estimated $175 million in proceeds. The website was established in 2005 and at one point ranked as the 13th most visited website on the Internet.

The feds indicted the site's founder, Kim Dotcom, aka Kim Schmitz, a 37-year-old resident of Hong Kong and New Zealand. He was arrested in New Zealand by New Zealand authorities.

Also indicted were employees Bram van der Kolk, aka Bramos, 29, Julius Bencko, Finn Batato, Sven Echternach, Mathias Ortmann, and Andrus Nomm. New Zealand authorities arrested Batato, Ortmann and van der Kolk. Bencko, Echternach and Nomm remain at large, officials said.

The indictment accuses the suspects of being members of "the Mega Conspiracy, a worldwide criminal organization whose members engaged in criminal copyright infringement and money laundering on a massive scale." The case comes a day after internet companies and websites such as Google, WordPress and Wikipedia protested about the Stop Online Piracy Act (SOPA) and the PROTECT IP Act (PIPA).

An hour after the indictment was announced, the Justice Department's website, www.Justice.gov, came under cyberattack with a denial-of-service attack. Anonymous, the hacktivist computer group, is claiming responsibility.

The indictment returned by a grand jury in Virginia alleges, "In exchange for payment, the Mega Conspiracy provides the fast reproduction and distribution of infringing copies of copyrighted works from its computer servers located around the world. Premium users of the site... are able to download and upload files with few, if any, limitations."

Describing the operation of the site and relations with users the indictment noted, "For much of its operation, the Mega Conspiracy has offered an 'Uploader Rewards' Program, which promised premium subscribers transfers of cash and other financial incentives to upload popular works, including copyrighted works, to computer servers under the Mega Conspiracy's direct control and for the Conspiracy's ultimate financial benefit."

The seven suspects have been charged with participating in a racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering and two substantive counts of criminal copyright infringement.

If convicted they could face a maximum of 20 years in prison.

There's always rapidshare which was always free to download,but you have to wait to download only a little bit of time,and only one at a time,so it's not so bad.

The police raids have been found to be illegal.

Read more here...

Something tells me those Anonymous folks are big fans of punk rock.

Just saw this on The Raw Story:

The founder of MegaUpload may be down, but he’s not out.

Despite having watched the U.S. government destroy his cloud-based storage website and accuse him of a “mega conspiracy” to defraud movie and music studios, online entrepreneur Kim Dotcom revealed this week that his ambitious new music service “Megabox” is still on track.

In an update published to the micro-blogging service Twitter, Dotcom revealed that his next business venture will connect artists and music lovers directly, offering free downloads and unlimited cloud-based media storage while also funneling advertising dollars to the content creators.

“The major Record Labels thought Megabox is dead,” Dotcom wrote. “Artists rejoice. It is coming and it will unchain you.”

Speaking to the technology publication Torrentfreak, Dotcom said the service, conceived more than a year ago, will allow artists to keep 90 percent of their profits from actual music sales.

Another innovation: artists will even get paid for free downloads through a new internal technology Dotcom is calling “Megakey.” It’s not yet clear how this would work, but it is likely based on technology developed for MegaUpload.

The service is expected to offer users free cloud-based media storage and social networking capabilities. A launch date has not yet been announced, but Digital Music News reported last December — just a month before Dotcom’s mansion was raided by police — that Megabox was already rife with major label content, and that they had partnered with Amazon MP3 and several other major players in digital music distribution.

“These guys think an iPad is a facial treatment, the internet is the devil, and wired phones are still hip,” Dotcom reportedly said. “They are in denial about the new realities and opportunities. They don’t understand that the rip-off days are over.”

Dotcom was arrested in January at his mansion in New Zealand after U.S. authorities accused him of running the largest copyright infringement scheme in history. Prosecutors are not having an easy go of the trial, however, and New Zealand courts have been hesitant to accept the charges at face value.
——

Photo: Courtesy, Instagram user kim_dotcom.

The extradition case could get very interesting. There seems to be a clause in American law that Kim Dotcom's Lawyer is looking into. Apparently Megaupload never 'committed a crime while on U.S. soil' which could possibly void the extradition case here in New Zealand. It will be interesting to see if our legal system caves in to the FBI's demands. I think that if the legal system won't budge then our government, who are hot for a free trade agreement with the U.S., will just change the law to suit the situation so they can continue to cuddle up to the trade negotiators. This sort of law making is all to common here with laws normally voted in at 3:30am when there's no-one around to oppose it.

It also appears that Megaupload were working on a legal music retail setup.

Here's the article:

Spanish Anger at Megaupload Closure

By David Roman

MADRID — A prominent Spanish lawyer is threatening a lawsuit over the Federal Bureau of Investigation’s decision to shut down Megaupload Ltd., one of the world’s most popular file-sharing website.

Barcelona-based Carlos Sánchez Almeida, a veteran of Internet privacy and piracy fights in Spain, says he’s upset at the move because it endangers the legal contents stored in Megaupload, now inaccessible for company customers. In a post in his Jaque Perpetuo blog, he’s recommending that Spanish users of the service gather information about the files they may lose due to the FBI shutdown, in preparation for a legal claim.

Mr. Almeida’s complaint is the most visible of many that have appeared all over social networks in Spain, as people who paid fees to store files in the “cyberlocker” wonder what comes next. This is important because Spain has already proved to be one tough cookie for U.S. law enforcement, when it comes to file-sharing shenanigans.

In February, U.S. authorities shut down Roja Directa, a website that specializes in posting links to shared sports content that had previously survived a legal challenge in its native Spain. No Roja Directa managers were arrested — unlike the case of Megaupload, where four company employees have already been charged — and the website simply moved away to an Indian domain extension.

Spain’s government has also tried to tighten the screws on the country’s happy-go-lucky file-sharing scene (at last count, more than 500 Spanish websites indulged in the practice) but it has faced significant opposition from cyber-activists armed with Spain’s stringent privacy laws. A recent corruption scandal in the country’s main artists union, a key opponent of file sharing, is only making it harder for the government to use FBI-style tactics.

As the FBI tries to make its case by pointing to the fact that Hong Kong-based Megaupload and its collection of websites generated more than $175 million in criminal proceeds and caused more than half a billion dollars in harm to copyright owners, Mr. Almeida and others take a different view: Megaupload served a role as cyberlocker for legal content and, in case of a conflict between the two sides of the coin, it is the citizen’s right to the privacy of personal files that should prevail.

One other argument is that, in the big scheme of things, Megaupload’s shutdown will only result in its replacement by smaller, more nimble file-sharing networks that will be even tougher to control. If Roja Directa’s continued survival is any guide, they may have a point.

Mardy Pune said:

I saw this on the Free Music Archives Twitter feed the other day: Megaupload tweet

It will be interesting to see how many people start complaining about having their private information illegally searched.

I saw this on the Free Music Archives Twitter feed the other day: Megaupload tweet

It will be interesting to see how many people start complaining about having their private information illegally searched.

Thanks, I'll check that out. What really sucks, that after years of waiting through the free download timer on Mega, I actually paid some money a month or two ago for a membership.

ixnayray said:

Get to work Mike! Mediafire is your best option at this point.

Mike said:

I better get my right clicking finger in top shape. I got a lot of downloading to do before this free for all drys up. Garage Hangover, Fuck The mummies, Killed By Death Records ... etc, here I come.

that had to be an riaa payback  "alright, we won't make noise (or take back our campaign contributions) if you kill sopa, but megaupload gotta come down today" lol.

regardless of the law, big bro WILL do what they want and always have.

Megaupload were pretty bold, getting in a war with the labels over that video/commercial they made.

Get to work Mike! Mediafire is your best option at this point.

Mike said:

I better get my right clicking finger in top shape. I got a lot of downloading to do before this free for all drys up. Garage Hangover, Fuck The mummies, Killed By Death Records ... etc, here I come.

I better get my right clicking finger in top shape. I got a lot of downloading to do before this free for all drys up. Garage Hangover, Fuck The mummies, Killed By Death Records ... etc, here I come.

Actually Kopper, three people ran this blogsite. He was only commenting on HIS 800GB. And I didn't really think about it at the time I posted... But yeah, that is a hell of a lot of music!

Holy crap... 800GB of music?! Do you realize how much music that is? I have an iPod that's ONE TENTH that size and I still can't fill it up! I'm surprised they even let him store that much on their site!

ixnayray said:

A friend of mine who runs a music blog informed me today that Filesonic has deleted all of his 'data'. All music, apparently. Over 800GB of it. Although Filesonic is still running, they have clearly gotten cold feet.

Ultimately, what a lot of these blog sites are doing is illegal. So like Kopper says, eventually the hammer has to fall. I'm actually surprised they've been getting away with it for so long.

A friend of mine who runs a music blog informed me today that Filesonic has deleted all of his 'data'. All music, apparently. Over 800GB of it. Although Filesonic is still running, they have clearly gotten cold feet.

Ultimately, what a lot of these blog sites are doing is illegal. So like Kopper says, eventually the hammer has to fall. I'm actually surprised they've been getting away with it for so long.

SOPA/PIPA would have made it a lot worse, to the extent that anyone even LINKING TO MegaUpload could have been held liable. This is really no different than what happened with Napster.

Also, I can't help but think that if you know you're in this kinda business to begin with, you gotta be expecting that hammer to come down on you sooner or later.

Jon said:

it's pretty scary seeing stuff like this happen. the US government was able to take down/restrict access to an entire site and its affiliated sites without SOPA or PIPA.

it's pretty scary seeing stuff like this happen. the US government was able to take down/restrict access to an entire site and its affiliated sites without SOPA or PIPA.

I'm wondering if the New Zealand Government should be implicated in the money laundering charges. The guy bought 10 Million dollars worth of NZ Govt Bonds and made an undisclosed donation to the Canterbury Earthquake Fund to get his residency rubber stamped.

I can't help but to be rooting for the hackers.

You know the funny thing is, though megaupload may make money off its service, it's not doing the file sharing. I know this has been gone over a million times with Napster etc etc. But really, shouldn't they be going after the US Postal Service next? How many bootleg records, CDs and mix tapes have they allowed their users to share, and for some, profit from? At least with sites like this, the for profit bootlegger is cut out of the action.

And then THIS happened:

http://rt.com/usa/news/anonymous-doj-universal-sopa-235/

WOW.