News

U.S. Charges Seven With ‘Massive Online Piracy’

1/23/2012 12:01 AM Eastern

Washington — The Department of Justice last Thursday
(Jan. 19) announced it had charged seven individuals
from Germany, Slovakia, Estonia and the Netherlands
and two corporations connected to the Megaupload.com
site with running an international organized crime enterprise
consisting of “massive worldwide online piracy” of
TV shows, movies, software, e-books and more.

The indictment came only hours after a Web-led
protest last Wednesday of legislation that would give
the Justice Department more power to combat online
video piracy.

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.”

That announcement could cut both ways in the debate
over online piracy legislation, either indicating
the scope of a crime that the DOJ need more tools to
fight, according to the bill’s backers, or that the U.S.
government was able to crack down on pirates without
such new weapons.

Sen. Patrick Leahy (D-Vt.) saw it as evidence of the
need for his PROTECT IP Act, the Senate version of
anti-piracy legislation that has drawn so much fi re
from Google and other Web companies.

“Today’s action by the Department of Justice
against the leaders of MegaUpload.com shows what
law enforcement can do to protect American intellectual
property that is stolen through domestic websites,”
Leahy said in a statement. “Unfortunately,
there are no tools in the arsenal to protect that same
American intellectual property from theft by websites
hosted and operated overseas. Why should we give
greater protections to criminals engaging in the same
conduct overseas?”

Megaupload.com advertised more than 1 billion
visits, more than 150 million registered users and 50
million daily visitors, which Justice says accounted
for 4% of total Internet traffic. It estimated the economic
harm at more than a half-billion dollars, and
said the conspirators had made more than $175 million
from illegal downloads.

According to Justice, MegaUpload.com did not terminate
the accounts of users who were known copyright
infringers, and complied only selectively with
take-down notices even while telling rightsholders
that it had complied.

Charged with racketeering conspiracy, conspiring
to commit copyright infringement, conspiring
to commit money laundering and two substantive
counts of criminal copyright infringement, the individuals
indicted face up to 50 years in prison if the
sentences are consecutive.

The Justice Department said four of the seven suspects
have been arrested in New Zealand, with the
others at large. It also executed 20 warrants in the U.S.
and eight other countries, and a U.S. District Court
ordered the seizure of 18 domain names associated
with the conspiracy.

September