The Department of Justice unsealed a 72-count indictment last week, charging Megaupload.com executives with numerous counts of copyright infringement, piracy, conspiracy, money laundering, and racketeering. The indictment alleges that Megaupload reaped 175 million dollars in profits at the expense of copyright holders and website subscription members.
Megaupload was a global file-sharing website, who charged members a monthly subscription fee for access to unlimited music, movies, and television downloads and streaming video. However, while members were paying Megaupload for this service, Megaupload did not pay anyone for their copyrights. The website's owners, several located in New Zealand, lived in the lap of luxury and drove Rolls Royce and Maserati cars with personalized license plates donning phrases like "Mafia Hacker" and "Guilty." DOJ estimates approximately 500 million dollars in damages resulted from Megaupload's scheme.
The franchise used web servers in eastern Virginia, enabling the charges to be filed there in federal court.
Several commentaries have argued that recent court decisions making international securities violations that occur overseas inaccessible to U.S. prosecutors will shield Megaupload from criminal convictions. While a good criminal lawyer will make this argument, international money laundering is still a very serious crime and will be difficult to defeat.
The Department of Justice shut down Megaupload's various websites upon releasing the indictment and issuing arrest warrants, sparking public debate with political hacktivist group "Anonymous." The group, garbed in their trademark Guy Fawkes masks, issued retaliatory statements against internet censorship and copyright laws, and promptly shut down several government and entertainment industry websites. The DOJ and Universal Music websites were down for what seemed like an entire day. Little does Anonymous know, each time one of their members buys a Guy Fawkes mask, Time Warner collects fees on their copyright license.
The evolution of this case and the political chatter surrounding it should be entertaining to say the least.
This blog post was written by law clerk Rosie Escobar Brown. Price Benowitz LLP was founded by federal criminal lawyer David Benowitz. The firm also handles cases in both Maryland and Virginia.