US federal authorities have added charges and broadened their case against the defendants in one of the largest anti-piracy operations.
The 90-page superseding indictment adds counts of criminal copyright infringement, conspiracy to commit money laundering and wire fraud against Megaupload.com and Megavideo.com.
The indictment alleges that the defendants reproduced copyrighted works from third-party websites, including from YouTube.com, so that they could be copied and distributed via Megavideo.com and to give the false impression that the website hosted content that was primarily generated by users and was not copyright-infringing content, the indictment says.
“In contrast to legitimate Internet distributors of copyrighted content, Megaupload.com does not make any significant payments to the copyright owners of the many thousands of works that are willfully reproduced and distributed on the Mega Sites each and every day,” the government says.
The document also says that the defendants’ claim of more than 180 million registered users is not supported by their own records, which show only 66.6 million registered users as of January 19. The figures also suggest that just 5.86 million of these users ever uploaded a file to Megaupload.com or Megavideo.com, meaning that more than 90 per cent of the sites’ registered users used the systems solely for downloads.
The government also added property, bank accounts, jet skis, jewellery and watches to the list of assets subject to forfeiture, and estimated the value at at least $175 million. Authorities said the ‘Mega Conspiracy’ organisation had generated more than $175 million in illegal profits through advertising revenue and the sale of premium memberships.
According to the indictment, Megaupload was once the 13th most-visited website on the Internet, serving as a hub for distribution of copyrighted television shows, images, computer software and video games.
To shut Megaupload, federal authorities executed 20 search warrants in eight countries, seizing 18 domain names and $50 million worth of assets, including servers located in Virginia, Washington, the Netherlands and Canada.