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US charges seven and shuts down file-sharing site

20 january 2012, 14:14
U.S. Attorney Preet Bharara announces charges against seven people during a news conference in New York. ©REUTERS/Mike Segar
U.S. Attorney Preet Bharara announces charges against seven people during a news conference in New York. ©REUTERS/Mike Segar
US authorities shut down one of the world's largest file-sharing sites on Thursday and charged seven people with copyright crimes, prompting hackers to disable the FBI and Justice Department's websites, AFP reports.

Megaupload.com went offline as justice officials and the Federal Bureau of Investigation laid out the details of what they described as "among the largest criminal copyright cases ever brought by the United States."

The founder of the Hong Kong-based Megaupload site was among four people arrested for online piracy and crimes that justice officials said had illegally netted them millions of dollars from subscriptions and advertising revenue.

The site is popular with Hollywood celebrities and has been endorsed by music stars such as Kanye West. It was also reported Thursday that Swizz Beatz, a music producer married to the singer Alicia Keys, was its chief executive.

Beatz, whose real name is Kasseem Dean, was not named in the indictment.

The announcement of the indictment came one day after Wikipedia, Google and other websites staged a protest against congressional legislation intended to crack down on online piracy.

Attempts to access the FBI, Justice Department, Universal Music, and Recording Industry Association of America portals failed, following retaliatory action by the "Anonymous" hacktivist group.

"Anonymous" announced that they had downed the sites.

"The Internet is here. Are you ready for The Year of Cyber War? We are. Rise up and join us to fight for your rights," YourAnonNews, an Anonymous-aligned group, said in a tweet.

In a statement, the Justice Department and FBI said the seven people charged were "responsible for massive worldwide online piracy of numerous types of copyrighted works, through Megaupload.com and other related sites."

They generated more than $175 million in criminal proceeds and caused "more than half a billion dollars in harm to copyright owners," the statement said, by offering pirated copies of movies, TV programs and other content.

French President Nicolas Sarkozy welcomed the US shutdown of Megaupload, saying the site's operators were reaping "criminal profits from the illegal distribution of copyrighted works."

"The time has come for increased judicial and police cooperation between states" in the fight against online piracy, Sarkozy said in a statement.

The US Justice Department said the seven "and others known and unknown" had been engaged in an enterprise that enriched its members and associates through copyright infringement and money laundering.

A Justice Department spokeswoman said the downing of its website was "being treated as a malicious act until we can fully identify the root cause of the disruption."

Megaupload Ltd and another company, Vestor Ltd, were indicted by a grand jury in Virginia and charged with racketeering conspiracy, various copyright infringement counts and conspiring to commit money laundering.

Among those indicted was Megaupload founder and sole shareholder of Vestor, Kim Dotcom, 37, a resident of Hong Kong and New Zealand who is also known as Kim Schmitz and Kim Tim Jim Vestor.

The others charged are Finn Batato, 38, of Germany; Julius Bencko, 35, of Slovakia; Sven Echternach, 39, of Germany; Mathias Ortmann, 40, of Germany; Andrus Nomm, 32, of Estonia; and Bram van der Kolk, 29, of the Netherlands.

The Justice Department and FBI said Dotcom, Batato, Ortmann and van der Kolk were arrested on Thursday in Auckland, New Zealand, by local authorities on the basis of arrest warrants requested by the United States.

Bencko, Echternach and Nomm remain at large.

The Justice Department and FBI said $50 million in assets was seized during the operation along with 18 domain names. Attempts to connect to Megaupload.com were unsuccessful on Thursday.

Conspiracy to commit racketeering and conspiracy to commit money laundering each carry maximum sentences of 20 years in prison while five years in prison is the maximum punishment for the copyright infringement charges.

New Zealand police confirmed four people were arrested in Auckland and would face court on Friday following a US request for their extradition.

The police said New Zealand authorities had been working on the case with the FBI and US Justice Department for several months.

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