SOPA Opera

Federal Prosecutors Shut Down File Sharing Site Megaupload for Piracy Violations

screen shot 2012 01 19 at 3 30 46 pm Federal Prosecutors Shut Down File Sharing Site Megaupload for Piracy Violations

Mr. Schmitz from the "Mega Song" video

The Associated Press is reporting that federal prosecutors in Virginia have shut down Megaupload.com, one of the world’s largest file-sharing sites. The indictment accuses the company’s founder and six others of violating piracy laws.

Earlier today, we reported confirmation from Swizz Beatz’s publicist that the recording artist is indeed Megaupload’s current CEO, but he did not found the company, which was started out of Hong Kong in 2005. [UPDATE: Megaupload's lawyer now says Swizz Beatz was merely negotiating to be the CEO.] Kim Schmitz, a German entrepreneur and hacker, is the company’s founder.

Mr. Schmitz, whose aliases are listed as Kim Dotcom and Kim Tim Jim Vestor in the indictment, has run afoul of the law before. Authorities say Mr. Schmitz and three other suspects, including senior executives, are already in custody.

As CNET reported earlier:

“According to legal documents filed in California, where Schmitz, 37, is engaged in a copyright battle, he rents cyberlockers to the masses, and nobody disputes that many millions of people from across the globe use Megaupload to store or access unauthorized copies of TV shows, feature films, songs, porn, and software.”

In the indictment, Megaupload is accused of costing copyright holders more than $500 million in lost revenue from pirated films and other content. The AP says the indictment was unsealed Thursday, following wide-spread protests against SOPA and PIPA, pending Congressional legislation that aims to censor such sites.

The indictment (below) calls the defendants members of the “Mega Conspiracy,” which the feds describe as “a worldwide criminal organization whose members engaged in criminal copyright infringement and money laundering on a massive scale,” with reported income of more than $175 million.

The company has presented itself as steadfast in responding to complaints about pirated material.

According to the indictment, Megaupload was once ranked the 13th most popular Web site in the world. In a promotional video called “Mega Song,” the company claims that Megaupload has 1 billion users. The indictment clarifies Megaupload’s stipulation, citing 1 billion visitors over the course of the company’s history with 180 million registered users to date and 50 million visits per day.

The “Mega Song” commercial is currently the subject of a lawsuit. In it, Mr. Schmitz (who sings a verse in the song) appears alongside celebrities like Sean “Diddy” Combs, Kanye West, and Will.i.am. Universal Music Group issued a take-down notice when it appeared in December, removing the commercial from YouTube on the grounds that the latter three recording artists (all UMG clients) gave unauthorized performances. Megaupload countered that it had signed contracts with the artists, and sued UMG.

This post has been updated to reflect new information as the story breaks. We have reached out to Swizz Beatz’s representatives and will update you as soon as we hear back. In the meantime, check out a mock-up of Swizz Beatz’s resume, courtesy of Billboard.com.

Mega Indictment

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