The Department of Justice has charged Megaupload with a “mega conspiracy” that, it alleges, netted the company’s executives a vast cache of money and luxury cars.
The indictment (see below for the full text in Scribd) refers to Megaupload’s offenses as the “Mega Conspiracy.” The company has been charged with five different counts concerning copyright infringement and money laundering. According to the indictment, Megaupload’s offenses include:
Running Megavideo.com, which streams copyright infringed television shows and movies
“Willfully reproduced and distributed” copyrighted content on its servers
Offering money as an incentive to upload infringing content between the dates of Septmeber 2005 and July 2011
Not terminating copyright offending accounts, as it states it can do in the Megaupload terms of service
“Made no significant effort to identify users” of the site, uploaders of copyrighted content, or the content itself
If found guilty, the defendants could spend up to 20 years in jail and might be liable for up to $175 million in fines.
“It’s really that inducement scenario that harkens back to the days of Napster,” said Owen Seitel of Idell & Sietel LLP, an entertainment and IP law firm. “I wouldn’t be surprised if the site totally shut down and never came back.”
By inducement, Seitel is referring to the action of offering financial compensation in exchange for uploading copyrighted content. On big sites like these, he explained, there is bound to be copyrighted material floating on the servers. But there are “safe harbors” that third-party content sites can take to protect themselves. One of these is complying with “notice and take down structures,” or flagging when copyrighted content comes into the system and then removing it. According to the indictment, Megaupload did not comply by flagging or removing content.
What’s really eye-opening about this indictment is the property that the Feds have seized from the defendants. It lists a number of bank accounts, PayPal accounts, 15 Mercedes-Benz vehicles, a Rolls-Royce with the license plate “GOD,” a rare Lamborghini and a Maserati. It seems the defendants had a number of vehicles with creative license plates including “HACKER,” “POLICE,” “STONED,” “GOOD,” “CEO,” and the ominous “GUILTY.” (See below for the full list.)
In addition, the indictment alleges the company or its associates spent a total of almost $8 million on yacht rentals in the Mediterranean from April to June 2011.
Seitel explained “indictments by their nature are overreaching” and that these allegations should be taken with a grain of salt.
Prior to being shut down by the DOJ, Megaupload released a statement calling the accusation of mass copyright-infringement “grotesquely overblown.” Indeed, a number of music celebrities have come out in support of Megaupload, prior to today’s events. The company’s new CEO, Swizz Beatz, is a musical artist himself and is married to singer Alicia Keys.
“It doesn’t surpise me to see celebrities on the side of the people when they’ve already been paid,” said Seitel, “It’s really not their content getting ripped off, it’s the studios’.”
In response to the indictment, hacker collective Anonymous took down the Department of Justice’s website, along with other music label sites. According to a tweet by @YourAnonNews, an impressive 5,635 Anonymous members contributed to the site attacks. It is rumored the group is planning to attack WhiteHouse.gov. The take down tactic being used is called LOIC, otherwise known as a low orbit ion cannon. LOIC is a public system that can be used to perform denial of service attacks.
The five different counts Megaupload faces include conspiracy to commit racketeering, conspiracy to commit copyright infringement, conspiracy to commit money laundering, criminal copyright infringement by distributing a copyrighted work being prepared for commercial distribution on a computer network & aiding and abetting of criminal copyright infringement, and criminal copyright infringement by electronic means & aiding and abetting of criminal copyright infringement.
Here’s the full list of seized goods, not counting bank accounts:
The indictment (see below for the full text in Scribd) refers to Megaupload’s offenses as the “Mega Conspiracy.” The company has been charged with five different counts concerning copyright infringement and money laundering. According to the indictment, Megaupload’s offenses include:
Running Megavideo.com, which streams copyright infringed television shows and movies
“Willfully reproduced and distributed” copyrighted content on its servers
Offering money as an incentive to upload infringing content between the dates of Septmeber 2005 and July 2011
Not terminating copyright offending accounts, as it states it can do in the Megaupload terms of service
“Made no significant effort to identify users” of the site, uploaders of copyrighted content, or the content itself
If found guilty, the defendants could spend up to 20 years in jail and might be liable for up to $175 million in fines.
“It’s really that inducement scenario that harkens back to the days of Napster,” said Owen Seitel of Idell & Sietel LLP, an entertainment and IP law firm. “I wouldn’t be surprised if the site totally shut down and never came back.”
By inducement, Seitel is referring to the action of offering financial compensation in exchange for uploading copyrighted content. On big sites like these, he explained, there is bound to be copyrighted material floating on the servers. But there are “safe harbors” that third-party content sites can take to protect themselves. One of these is complying with “notice and take down structures,” or flagging when copyrighted content comes into the system and then removing it. According to the indictment, Megaupload did not comply by flagging or removing content.
What’s really eye-opening about this indictment is the property that the Feds have seized from the defendants. It lists a number of bank accounts, PayPal accounts, 15 Mercedes-Benz vehicles, a Rolls-Royce with the license plate “GOD,” a rare Lamborghini and a Maserati. It seems the defendants had a number of vehicles with creative license plates including “HACKER,” “POLICE,” “STONED,” “GOOD,” “CEO,” and the ominous “GUILTY.” (See below for the full list.)
In addition, the indictment alleges the company or its associates spent a total of almost $8 million on yacht rentals in the Mediterranean from April to June 2011.
Seitel explained “indictments by their nature are overreaching” and that these allegations should be taken with a grain of salt.
Prior to being shut down by the DOJ, Megaupload released a statement calling the accusation of mass copyright-infringement “grotesquely overblown.” Indeed, a number of music celebrities have come out in support of Megaupload, prior to today’s events. The company’s new CEO, Swizz Beatz, is a musical artist himself and is married to singer Alicia Keys.
“It doesn’t surpise me to see celebrities on the side of the people when they’ve already been paid,” said Seitel, “It’s really not their content getting ripped off, it’s the studios’.”
In response to the indictment, hacker collective Anonymous took down the Department of Justice’s website, along with other music label sites. According to a tweet by @YourAnonNews, an impressive 5,635 Anonymous members contributed to the site attacks. It is rumored the group is planning to attack WhiteHouse.gov. The take down tactic being used is called LOIC, otherwise known as a low orbit ion cannon. LOIC is a public system that can be used to perform denial of service attacks.
The five different counts Megaupload faces include conspiracy to commit racketeering, conspiracy to commit copyright infringement, conspiracy to commit money laundering, criminal copyright infringement by distributing a copyrighted work being prepared for commercial distribution on a computer network & aiding and abetting of criminal copyright infringement, and criminal copyright infringement by electronic means & aiding and abetting of criminal copyright infringement.
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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