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Megaupload site shut down on piracy allegations

A serious blow to free internet landed when on Thursday The Department of Justice announced that it has conducted a major action against seven individuals and two companies behind the popular file-sharing website megaupload.com, a popular file-sharing site widely used for free downloads of movies and television shows.


After receiving indictments from a grand jury in Virginia for racketeering conspiracy, conspiracy to commit copyright infringement and other charges on Jan. 5, federal authorities on Thursday arrested four people and executed more than 20 search warrants in the U.S. and eight foreign countries, seizing 18 domain names and an estimated $50 million in assets, including servers run in Virginia and Washington, D.C.




The indictments, which do not include Swizz Beats, seemed to trigger a series of distributed-denial-of-service attacks, apparently by the hacker group Anonymous, that hobbled several federal and entertainment industry websites. 

MegaUpload is a "digital locker" that allows users to store files that can then be streamed or downloaded by others. Its subsidiary site MegaVideo became very popular for the unauthorized downloads of movies and TV shows. Users whose uploaded content proved particularly popular were paid for their participation.

In a joint statement, the Justice Department and FBI called the action "among the largest criminal copyright cases ever brought by the United States."

Ira Rothken, an attorney for MegaUpload, said in an interview that he only learned of the actions in a press release this morning and had not yet read the entire indictment. "Our initial impression is that the allegations are without merit and MegaUpload is going to vigorously contest them," he said. "We have deep concerns over due process and assets being taken without the opportunity for a hearing."

According to the indictment, the operators of MegaUpload earned more than $175 million in illegal profits and caused an estimated $500 million in harm to copyright holders.

The site is advertised as having more than 50 million daily visitors, according to federal authorities.

Four of MegaUpload's operators have been arrested in New Zealand, while three more remain at large. The seven each face a maximum of 55 years in prison.

Not listed on the indictment is rapper Swizz Beatz -- real name Kasseem Dean -- who, according to a report in the New York Post, is the CEO of MegaUpload. Beatz is married to pop singer Alicia Keys.

Rothken said that Beatz had not been running the site but that recently there had been "a transition period going on." 

The case came a day after Internet companies and websites such as Google, WordPress,  Mozilla, Wikipedia, Wired, Reddit and as many as 10,000 others websites went black to protested about the Stop Online Piracy Act (SOPA) and the PROTECT IP Act (PIPA).

The news is sure to be welcome in the entertainment industry, whose leaders have faced a recent setback in their push for the Stop Online Piracy Act and Protect Intellectual Property Act. The proposed bills, if passed, would make it easier for U.S. courts to go after piracy sites that, unlike MegaUpload, operate entirely overseas.

The Obama administration announced its opposition to the bills in their current forms Saturday.

An hour after the indictment was announced, the Justice Department's website, www.justice.gov, came under cyberattack. Anonymous, the hacktivist computer group, claimed responsibility.

Asked about the claims by Anonymous, a Justice Department spokeswoman said, "The Department of Justice Web server hosting justice.gov is currently experiencing a significant increase in activity, resulting in a degradation in service. The department is working to ensure the website is available while we investigate the origins of this activity, which is being treated as a malicious act until we can fully identify the root cause of the disruption."

The Justice website appeared to be back online this evening, but with limited graphics and pictures.

The FBI's website also appeared briefly to be inaccessible, but later came back online.

The attacks appeared to be distributed-denial-of-service attacks, rather than hacks in which data was compromised or lost. Distributed-denial-of-service attacks flood Internet sites and computer networks with requests for information and commands, making the networks and websites unavailable to computer users.

Members of Anonymous were sending around a link that appeared to help contribute to the attack, with some computer users sending requests to FBI.gov and justice.gov when they clicked the link.

Websites for the Recording Industry Association of America, Universal Music and the Motion Picture Association of America also appeared to be unavailable or under attack.

The federal indictment returned by a grand jury in Virginia against megaupload.com alleged, "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."


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


Barrett Brown a spokesperson for the group Anonymous said in an interview with news outlet RT that it is a terrible case of happenstance that agents went after Megaupload only hours after the thousands of sites protesting in an anti-SOPA blackout went back online. "Web surfers were by-and-far ready to defend an open Internet" the article states, and Brown said that the agents “could not have chosen a worse time to take down Megaupload.”
“Even without SOPA having been passed yet, the federal government always had tremendous power to do some of the things that they want to do. So if this is what can occur without SOPA being passed, imagine what can occur after SOPA is passed,” Brown told RT.




Here’s the full list of seized goods, not counting bank accounts:

  • 2010 Maserati GranCabrio, VIN ZAMKM45B000051328, License Plate No. “M-FB 212” or “DH-GC 470”, registered to FINN BATATO;
  • 2009 Mercedes-Benz E500 Coupe, VIN WDD20737225019582, License Plate No. “FEG690”;
  • 2005 Mercedes-Benz CLK DTM, VIN WDB2093422F165517, License Plate No. “GOOD”;
  • 2004 Mercedes-Benz CLK DTM AMG 5.5L Kompressor, VIN WDB2093422F166073, License Plate No. “EVIL”;
  • 2010 Mercedes-Benz S65 AMG L, VIN WDD2211792A324354, License Plate No. “CEO”;
  • 2008 Rolls-Royce Phantom Drop Head Coupe, VIN SCA2D68096UH07049; License Plate No. “GOD”;
  • 2010 Mercedes-Benz E63 AMG, VIN WDD2120772A103834, License Plate No. “STONED”;
  • 2010 Mini Cooper S Coupe, VIN WMWZG32000TZ03651, License Plate No. “V”;
  • 2010 Mercedes-Benz ML63 AMG, VIN WDC1641772A608055, License Plate No. “GUILTY”;
  • 2007 Mercedes-Benz CL65 AMG, VIN WDD2163792A025130, License Plate No. “KIMCOM”;
  • 2009 Mercedes-Benz ML63 AMG, VIN WDC1641772A542449, License Plate No. “MAFIA”;
  • 2010 Toyota Vellfire, VIN 7AT0H65MX11041670, License Plate Nos. “WOW” or “7”;
  • 2011 Mercedes-Benz G55 AMG, VIN WDB4632702X193395, License Plate Nos. “POLICE” or “GDS672”;
  • 2011 Toyota Hilux, VIN MR0FZ29G001599926, License Plate No. “FSN455”;
  • Harley Davidson Motorcycle, VIN 1HD1HPH3XBC803936, License Plate No. “36YED”;
  • 2010 Mercedes-Benz CL63 AMG, VIN WDD2163742A026653, License Plate No. “HACKER”;
  • 2005 Mercedes-Benz A170, VIN WDD1690322J184595, License Plate No. “FUR252”;
  • 2005 Mercedes-Benz ML500, VIN WDC1641752A026107, License Plate No. DFF816;
  • Fiberglass sculpture, imported from the United Kingdom with Entry No. 83023712;
  • 1957 Cadillac El Dorado, VIN 5770137596;
  • 2010 Sea-Doo GTX Jet Ski, VIN YDV03103E010;
  • 1959 Cadillac Series 62 Convertible, VIN 59F115669;
  • Von Dutch Kustom Motor Bike, VIN 1H9S14955BB451257;
  • 2006 Mercedes-Benz CLK DTM, VIN WDB2094421T067269;
  • 2010 Mini Cooper S Coupe, VIN WMWZG32000TZ03648 License Plate No. “T”;
  • 1989 Lamborghini LM002, VIN ZA9LU45AXKLA12158, License Plate No. “FRP358”
  • 2011 Mercedes-Benz ML63, VIN 4JGBB7HB0BA666219;
  • Samsung 820DXN 82” LCD TV;
  • Samsung 820DXN 82” LCD TV;
  • Samsung 820DXN 82” LCD TV;
  • Devon Works LLC, Tread #1 time piece;
  • Artwork, In High Spirits, Olaf Mueller photos from The Cat Street Gallery;
  • Sharp 108” LCD Display TV;
  • Sharp 108” LCD Display TV;
  • Sony PMW-F3K Camera S/N 0200231;
  • Sony PMW-F3K Camera S/N 0200561;
  • Artwork, Predator Statue;
  • Artwork, Christian Colin;
  • Artwork, Anonymous Hooded Sculpture;
  • 2009 Mercedes-Benz ML350 CDI 4MATIC Off-Roader;
  • Sharp LC-65XS1M 65” LCD TV;
  • Sharp LC-65XS1M 65” LCD TV;
  • TVLogic 56” LUM56W TV;
  • Sixty (60) Dell R710 computer servers.

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