[Infowarrior] - MegaUpload shut down by FBI

[Richard Forno]

	• TECHNOLOGY
	• JANUARY 19, 2012, 4:05 P.M. ET

http://online.wsj.com/article/SB10001424052970204616504577171060611948408.html#printMode

FBI Charges Seven With Online Piracy

By DEVLIN BARRETT

WASHINGTON—The Federal Bureau of Investigation shut down Thursday one of the world's most popular file-sharing websites, MegaUpload.com, and announced the arrest of four of the people behind it in a global crackdown against the suspected online pirates.

The move came a day after Washington lawmakers were besieged by complaints about legislation designed to crack down on the online sharing of pirated copies of music, movies and other material, people familiar with the matter said.

Investigators said there was no connection between arrests in their two-year investigation and the political firestorm that erupted this week over a pending vote on the Stop Online Piracy Act.

MegaUpload Ltd., which is based in Hong Kong, is one of several popular online storage services. It lets individuals upload files—anything from a document to a digital movie—and provide Internet links that other individuals can use to download a copy. The site claims it has 50 million daily users.

Lawyers for MegaUpload couldn't immediately be reached.

Seven people have been charged with online piracy crimes in an indictment unsealed in northern Virginia. Four of those suspects are already in custody, authorities said. The MegaUpload.com website, which was available earlier Thursday, appeared to no longer be online later in the day.

The four were arrested in New Zealand. Federal agents and other law enforcement agencies simultaneously moved to search bank records and server farms in multiple locations around the globe, authorities said. The charges include conspiracy to commit racketeering and criminal copyright infringement.

MegaUpload.com is already engaged in a legal fight with Vivendi SA's Universal Music Group over a promotional video featuring some UMG artists, including Kayne West, Mary J. Blige, Kim Kardashian and others.

The site's chief executive has been reported to be music producer Swizz Beatz, whose real name is Kaseem Dean and who is the spouse of Alicia Keys. Mr. Dean wasn't named in the indictment. Rich Spears, an agent for Swizz Beatz, said he wasn't sure whether the musician is a MegaUpload executive and declined to comment further.

On a "frequently asked questions'' section of the website, MegaUpload acknowledges that some have criticized its practices, but insists it is an above-board business.

"The fact is that the vast majority of mega's Internet traffic is legitimate, and we are here to stay. If the content industry would like to take advantage of our popularity, we are happy to enter into a dialogue,'' the website reads in part.

The Justice Department paints a different picture.

According to the indictment, MegaUpload is responsible for at least $500 million in losses for the owners of the copyrights in question.

The indictment calls the company "a worldwide criminal organization whose members engaged in criminal copyright infringement and money laundering on a massive scale.''

Investigators estimate that MegaUpload's piracy business has earned them more than $175 million, according to the indictment.

Write to Devlin Barrett at devlin.barrett at wsj.com


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