DOJ Hands Down Charges to Seven People, Two Corporations Connected With Megaupload

Charged with running an international organized crime enterprise consisting of "massive worldwide online piracy" of TV shows, movies, software, e-books and more

By John Eggerton -- Broadcasting & Cable, 1/19/2012 3:08:56 PM

Only hours after a web-led protest of legislation (SOPA and PIPA) that would give the Justice Department more power to combat burgeoning online video piracy, DOJ Thursday announced it had charged seven individuals from German, Slovakia, Estonia and the Netherlands and two corporations connected to the Megaupload.com site with running an international organized crime enterprise consisting of "massive worldwide online piracy" of TV shows, movies, software, e-books and more.

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." That announcement could cut both ways in the debate over online piracy legislation, either indicating the scope of a crime that bill backers say Justice needs more tools to combat, or indicating Justice was able to crack down without new weapons critics say threaten the Internet's openness and due process.

Megaupload.com advertised more than a billion visits and more than 150 million registered users, 50 million daily visitors, which Justice says accounted for 4% of total Internet traffic. It estimated the economic harm at more than a half billion dollars and said the conspirators had made more than $175 million from illegal downloads. 

According to Justice, Megaupload.com did not terminate the accounts of users with known copyright infringement, only selectively complied with take-down notices while telling copyright holders they had complied.

The individuals were charged with racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering and two substantive counts of criminal copyright infringement; they face up to 50 years in prison if the sentences are consecutive.

Justice said four of the seven have been arrested in New Zealand, with the others at large. It also executive 20 warrants in the U.S. and eight other countries, and a U.S. District court ordered the seizure of 18 domain names associated with the conspiracy.