Feds shut down MegaUpload file-sharing site for alleged piracy

The Justice Department has conducted a major action to shut down MegaUpload, 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 Jan. 5, federal authorities Thursday arrested four people and executed more than 20 search warrants in the U.S. and eight foreign countries. Authorities also seized 18 domain names and an estimated $50 million in assets, including servers run in Virginia and Washington, D.C.

MegaUpload is a “digital locker” that allows users to store files that can be streamed or downloaded by others.

Its subsidiary site MegaVideo became popular for unauthorized downloads of movies and TV shows. Users whose 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 Thursday that he only learned of the actions in a press release 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, MegaUpload’s operators 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 were arrested in New Zealand, while three more remain at large. Not listed on the indictment is rapper Swiss Beatz — whose real name is Kasseem Dean — who, according to a report in the New York Post, is the chief executive of MegaUpload. Beatz is married to pop singer Alicia Keys.

Rothken said that Beatz had not been running the site and that recently there had been “a transition period going on.”

The seven MegaUpload operators each face a maximum of 55 years in prison.


The news was welcomed in the entertainment industry, whose leaders have faced resistance to two anti-piracy bills thatwould make it easier for U.S. courts to go after piracy sites that, unlike MegaUpload, operate entirely overseas.

Critics who believe that the bills are heavy-handed and don’t adequately protect civil liberties conducted a U.S. Internet “blackout” Wednesday. As many as 10,000 websites, among them Wikipedia, Craigslist and Reddit, went dark.

“This criminal case, more than two years in development, shows that law enforcement can take strong action to protect American intellectual property stolen through sites housed in the United States,” Motion Picture Assn. of America Chief Executive Christopher J. Dodd said in a statement. “Similar tools are needed to go after foreign-based websites.”

The websites of the Justice Department and Universal Music Group, which had been involved in litigation with MegaUpload, went down Thursday, as did sites for the Motion Picture Assn. of America and the Recording Industry Assn. of America. The hacker group Anonymous took credit, according to a report on CNET News.