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Saturday, January 21, 2012

Megaupload closed by FBI

 And so it begins, the great Internet War of 2012  — What Does it Mean?

WASHINGTON - Seven individuals and two corporations have been charged in the United States with running an international organized criminal enterprise allegedly responsible for massive worldwide online piracy of numerous types of copyrighted works, through and other related sites, generating more than $175 million in criminal proceeds and causing more than half a billion dollars in harm to copyright owners, the U.S. Justice Department and FBI announced today.

This action is among the largest criminal copyright cases ever brought by the United States and directly targets the misuse of a public content storage and distribution site to commit and facilitate intellectual property crime.
The individuals and two corporations - Megaupload Limited and Vestor Limited - were indicted by a grand jury in the Eastern District of Virginia on Jan. 5, 2012, and charged with engaging in a racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering and two substantive counts of criminal copyright infringement. 

The individuals each face a maximum penalty of 20 years in prison on the charge of conspiracy to commit racketeering, five years in prison on the charge of conspiracy to commit copyright infringement, 20 years in prison on the charge of conspiracy to commit money laundering and five years in prison on each of the substantive charges of criminal copyright infringement.
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. 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.

In addition, the following alleged members of the Mega conspiracy were charged in the indictment:

  • 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.

Coming on the heels of yesterday’s organized internet blackout where several major sites went dark to protest the SOPA (Stop Online Piracy Act) and PIPA  (Protect Intellectual Property Act) bills from becoming law, it seems that another mini internet war has sprung up this afternoon.

It was announced, without any real provocation, that popular online downloading site was seized and shut down by the Department of justice. According to the federal indictment, the Justice Department claims that, which is run by rapper/producer Swizz Beatz (pictured below), has generated more than $175 million in criminal proceeds and costs copyright-holders more than $500 million in lost revenue from pirated movies, albums and other materials. Thus as of this morning, the site was shut down and several people connected to the Hong Kong-based downloading giant were arrested and charged with copyright infringement and other crimes.

CEO of Swizz Beatz
This has happened before with other music downloading sites (many connected to the hip-hop world) when the internet police decided to lay down the hammer.
But alas, those of us in favor of free media have internet goons on our side as well.
This afternoon, global computer hacker group Anonymous went on the offensive in direct response to being axed and quickly shutdown Universal Music Group’s website along with other major sites such as the (Recording Industry Association of America) and A spokesman for Anonymous has stated that the group hacked and shut down those websites today in defense of Megaupload. This actually has the potential to get worse.
For starters, the fact that Anonymous was even capable of shutting down the Justice Department’s website and Universal Music Group’s is a big deal. Because both of those organizations are in support of SOPA/PIPA and want to stop online piracy at all costs, having a group like Anonymous crashing their websites is no small feat. Let’s be clear: UMG and RIAA’s websites being targeted are one thing but totally shutting down the Justice Department’s website is a huge blow and rather embarrassing!  Of course, neither of these major players in the SOPA/PIPA battle will take kindly to being shutdown today and will likely go after even more sites that they feel are guilty of piracy. If and when that happens, Anonymous will likely retaliate again.
There aren’t any clear winners or losers in all of this but it is good to know that the Department of Justice now has to think twice about probable retaliation before they seize another website. It’s not clear what will happen next but with President Obama announcing that he no longer supports the SOPA bill and 19 Senators joining him in that statement, those who truly oppose online piracy will have to go back to square one and draft all new legislation if they want any bill to clear the House and the Senate.
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