Megaupload Shutdown by FBI: 7 Charged as F.B.I. Closes a Top File-Sharing Site -

7 Charged as F.B.I. Closes a Top File-Sharing Site

The federal authorities on Thursday announced that they had charged seven people connected to the Web site Megaupload, including its founder, with running an international criminal enterprise centered on copyright infringement on the Internet.
According to a grand jury indictment, Megaupload — one of the most popular “locker” services on the Internet, which lets users anonymously transfer large files — generated $175 million in income for its operators through subscription fees and advertising, while causing $500 million in damages to copyright holders.
Four of the seven people, including the site’s founder Kim Dotcom, born Kim Schmitz, have been arrested in New Zealand, the Justice Department and Federal Bureau of Investigation said on Thursday; the three others remain at large. The seven — who a grand jury indictment calls part of a “Mega Conspiracy” — have been charged with five counts of copyright infringement and conspiracy, the authorities said.
The charges, which the government agencies said represented “among the largest criminal copyright cases ever brought by the United States,” come at a charged time, a day after online protests against a pair of antipiracy bills being considered by Congress — the Stop Online Piracy Act, or SOPA, in the House, and the Protect I.P. Act, or PIPA, in the Senate.
In response to the arrests, the hacker collective known as Anonymous said it had taken down the Web sites of the Justice Department, the Motion Picture Association of America, and the Recording Industry Association of America. All three sites were inaccessible late Thursday afternoon.
The indictment in the Megaupload case was handed down by a grand jury in Virginia two weeks ago, but was unsealed on Thursday, and stems from a federal investigation that began two years ago.
The Megaupload case touches on many of the most controversial aspects of the antipiracy debate.
Megaupload and similar locker sites, like Rapidshare and Mediafire, are often promoted as being convenient ways to legitimately transfer large files — a recent promotional video had major stars like of the Black Eyed Peas singing Megaupload’s praises. But they have become notorious among media companies, who see them as abetting copyright infringement on a large scale by giving people easy, but unauthorized, access to movies, music and other content.
Megaupload is currently engaged in a lawsuit with Universal over the promotional video and Universal’s efforts to have it removed from YouTube.
As part of the crackdown on Megaupload, 20 search warrants were executed in nine countries, including the United States. About $50 million in assets were also seized, as well as a number of servers and 18 domain names, the authorities said.
Ira P. Rothken, a lawyer for Megaupload, said in a phone interview on Thursday afternoon that he had not yet seen the indictment, but he added: “Clearly we have due process concerns. This was done without a hearing.”

7 Charged as F.B.I. Closes a Top File-Sharing Site -