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The U.S. Department of Justice shut down the Hong Kong-based file-sharing service Megaupload on Thursday during an ongoing investigation into the company's alleged copyright infringement. The Federal Bureau of Investigation (FBI) and U.S. Justice Department announced on Thursday that seven individuals and two corporations have been charged in the United States with violating piracy laws and committing other crimes.
According to an indictment filed by a grand jury in the U.S. District Court of Alexandria, Virginia on January 5, the defendants were accused of two substantive counts of criminal copyright infringement and conspiracies to commit money laundering, racketeering, and copyright infringement. The indictment listed 103 alleged, overt criminal acts, including a 2010 incident involving a user who watched the television anime series Fruits Basket via a linking site.
The U.S. Justice Department claims that Megaupload Limited, Vestor Limited, and seven individuals gained more than US$175 million in illegal proceeds and cost copyright holders more than US$500 million in lost revenue. The FBI's press release labels Megavideo and its related sites and services as an "international organized criminal enterprise" responsible for large-scale worldwide piracy of various copyrighted works. As one of the largest criminal copyright cases brought by the United States, officials executed more than 20 search warrants in nine countries, confiscated about US$50 million in assets, and seized 18 domain names associated with the alleged "Mega conspiracy" on Thursday.
Founded in 2005, Megaupload allowed users to reproduce and distribute movies, music, television programs, electronic books, and software, according to the grand jury's indictment. The legal document also alleges that Megaupload supported the use of third-party linking websites to promote infringing content and used a business model designed to encourage illegal uploading. The U.S. Justice Department said that the company failed to delete accounts of users known to distribute copyrighted material and misrepresented that infringing copies of works were removed.
The individual defendants are citizens of Germany, Slovakia, Finland, Estonia, and the Netherlands. New Zealand authorities arrested four of the defendants, including the Megaupload founder Kim Dotcom and director Mathias Ortmann, in Auckland on Thursday. The accused individuals each face a maximum sentence of 65 years in prison for the combined charges. According to BBC News, Megaupload posted a message saying that "the vast majority of Mega's internet traffic is legitimate" and that the allegations were "grotesquely overblown" before the site was shut down on Thursday.
Last February, police in Japan's northern Akita Prefecture arrested an 18-year-old male student for allegedly using Megaupload to illegally distribute 260 manga titles.
On Wednesday, various websites participated in an Internet "blackout" to protest the Stop Online Piracy Act (SOPA) and Protect Intellectual Property Act (PIPA) bills that were proposed in the U.S. Congress.
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