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Virginia grand jury indicts seven people, two companies for copyright infringement

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A federal grand jury in Virginia has indicted seven people and two companies on charges they pirated copyrighted works through Megaupload.com and related websites.

The FBI and federal prosecutors said the investigation of Megaupload Ltd and its sister company, Vestor Ltd,, ranks among the largest criminal copyright cases brought by the U.S. and directly targets the misuse of a public content storage and distribution site to commit intellectual property crime. 

The file-sharing website Megaupload.com was shut down Thursday.

Federal officials said the site generated more than $175 million in proceeds,causing more than half a billion dollars in harm to copyright owners.

The indictment by a grand jury in the Eastern District of Virginia alleges that the enterprise was led by Kim Dotcom, also known as Kim Schmitz, and Kim Tim Jim Vestor, 37, a resident of both Hong Kong and New Zealand.

Dotcom founded Megaupload Ltd. and is the director and sole shareholder of Vestor Ltd, which has been used to hold ownership interests in the Mega-affiliated sites.

In addition, the following alleged members of the 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.

All were 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.

They 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.

Dotcom, Batato, Ortmann, and van der Kolk were arrested Thursday in Auckland, New Zealand, by New Zealand authorities. Bencko, Echternach, and Nomm remain at large.

Law enforcement officers also executed more than 20 search warrants in the United States and eight countries, seized approximately $50 million in assets and targeted sites where Megaupload has servers in Ashburn, Washington, D.C., the Netherlands and Canada. In addition, the U.S. District Court in Alexandria ordered the seizure of 18 domain names associated with the alleged Mega conspiracy.

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.

The conspirators’ content hosting site, Megaupload.com, is advertised as having more than one billion visits to the site, more than 150 million registered users, 50 million daily visitors, and accounting for 4 percent of the total traffic on the Internet.


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