WASHINGTON, DC—In what the U.S. Justice Department is calling “the largest criminal copyright cases ever brought by the United States," the founder/owner of Hong Kong-based Megaupload.com and six non-U.S. employees of the file-hosting site and other Mega-related sites have been charged with operating an “international organized criminal enterprise” that generated more than $175 million in criminal proceeds while creating more than a half billion in harm to copyright owners. Megaupload also was taken offline Thursday by the feds.
“The indictment alleges that the criminal enterprise is led by Kim Dotcom, aka Kim Schmitz and Kim Tim Jim Vestor, 37, a resident of both Hong Kong and New Zealand,” a statement released today by the DoJ stated. “Dotcom founded Megaupload Limited and is the director and sole shareholder of Vestor Limited, which has been used to hold his ownership interests in the Mega-affiliated sites.”
Dotcom’s alleged co-conspirators are:
* Finn Batato, 38, a citizen and resident of Germany, who is the chief marketing officer;
* Julius Bencko, 35, a citizen and resident of Slovakia, who is the graphic designer;
* Sven Echternach, 39, a citizen and resident of Germany, who is the head of business development;
* Mathias Ortmann, 40, a citizen of Germany and resident of both Germany and Hong Kong, who is the chief technical officer, co-founder and director;
* Andrus Nomm, 32, a citizen of Estonia and resident of both Turkey and Estonia, who is a software programmer and head of the development software division;
* Bram van der Kolk, aka Bramos, 29, a Dutch citizen and resident of both the Netherlands and New Zealand, who oversees programming and the underlying network structure for the Mega conspiracy websites.
The statement added that four of the individuals— Dotcom, Batato, Ortmann and van der Kolk–were arrested today in Auckland, New Zealand, and that the others remain at large.
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.”
Far from being a passive abettor of copyright infringement, Megaupload is alleged to have been a very active participant, enabler and promoter of illegal activity.
“The indictment states that the conspirators conducted their illegal operation using a business model expressly designed to promote uploading of the most popular copyrighted works for many millions of users to download,” said the DoJ today, addingthat the site was also “structured to discourage the vast majority of its users from using Megaupload for long-term or personal storage by automatically deleting content that was not regularly downloaded.”
According to the feds, “The conspirators further allegedly offered a rewards program that would provide users with financial incentives to upload popular content and drive web traffic to the site, often through user-generated websites known as linking sites. The conspirators allegedly paid users whom they specifically knew uploaded infringing content and publicized their links to users throughout the world.”
This significant action by the United States follows a victory in November for Perfect 10, which won a settlement with Megaupload after a Los Angeles judge “issued an order that not only refused to dismiss Perfect 10’s copyright infringement lawsuit against ‘file storage’ company Megaupload, but also set the stage for a rare court victory for Perfect 10’s Norm Zada.”