Feds say 7 from Megaupload.com ran massive worldwide piracy website
McLEAN, Va. – Federal prosecutors in Virginia have shut down one of the world's largest file-sharing sites, Megaupload.com, and charged its founder and others with violating piracy laws -- a day after a 24-hour blackout of popular websites such as Wikipedia drew national attention to the issue.
The indictment is among the largest criminal copyright cases ever brought by the United States, according to the FBI.
It accuses seven individuals and two corporations -- Megaupload Limited and Vestor Limited -- of costing copyright holders more than $500 million in lost revenue from pirated films and other content. The indictment, which was unsealed on Thursday, says that at one point Megaupload was the 13th most popular website in the world.
Megaupload.com has claimed it is diligent in responding to complaints about pirated material.
The individuals in the criminal enterprise -- a worldwide ring led by Australians Kim Dotcom, aka Kim Schmitz, and Kim Tim Jim Vestor -- each face a maximum penalty of 20 years in prison on racketeering charges, five years for conspiracy to commit copyright infringement, 20 years on money laundering charges and five years on related charges.
The indictment comes the day after a 24-hour "blackout" of Wikipedia, a protest doodle on the homepage of Google, and numerous other protests across the Internet against proposed anti-piracy legislation that many leading websites -- including Reddit, Google, Facebook, Amazon and others -- contend will make it challenging if not impossible for them to operate.
The Protect Intellectual Property Act under consideration in the Senate and the Stop Online Piracy Act (SOPA) in the House are bills backed by the motion picture and recording industries intended to eliminate theft online once and for all. S. 968 and H.R. 3261 would require ISPs to block access to foreign websites that infringe on copyrights.
Online piracy from China and elsewhere is a massive problem for the media industry, one that costs as much as $250 billion per year and costs the industry 750,000 jobs, according to a 2008 statement by Patrick Leahy, D-Vt.
But how exactly the bills would counter piracy has many up in arms.
The Associated Press contributed to this report.
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