In a grand jury indictment, the operators of the site Megaupload
are accused of causing $500 million in damages to copyright owners
and of making $175 million through selling ads and premium
In what the U.S. authorities have called one of the largest
criminal copyright cases ever brought, the Justice Department and
the F.B.I. have seized the Web site Megaupload and charged seven
people connected with it with running an international enterprise
based on Internet piracy.
Megaupload, one of the most popular so-called locker services on
the Internet, allowed users to transfer large files like movies and
music anonymously. Media companies have long accused it of abetting
copyright infringement on a vast scale. In a grand jury indictment,
Megaupload is accused of causing $500 million in damages to
copyright owners and of making $175 million by selling ads and
Four of the seven people, including the site's founder, Kim
Dotcom (born Kim Schmitz), were arrested Friday in New Zealand; the
three others remain at large. Each of the seven people, who the
indictment said were members of a criminal group it called Mega
Conspiracy, is charged with five counts of copyright infringement
and conspiracy. The charges could result in more than 20 years in
As part of the crackdown, about 20 search warrants were executed
in the United States and in eight other countries, including New
Zealand. About $50 million in assets were also seized, as well as a
number of servers and 18 domain names that formed Megaupload's
network of file-sharing sites.
The police arrived at Dotcom Mansion in Auckland on Friday
morning in two helicopters. Mr. Dotcom, a 37-year-old with dual
Finnish and German citizenship, retreated into a safe room, and the
police had to cut their way in. He was eventually arrested with a
firearm close by that the police said appeared to be a shortened
"It was definitely not as simple as knocking at the front door,"
said Grant Wormald, a detective inspector.
The police said they had seized 6 million New Zealand dollars, or
$4.8 million, in luxury vehicles, including a Rolls-Royce Phantom
Drophead Coupe and a pink 1959 Cadillac. They also seized art and
electronic equipment and froze 11 million dollars in cash in various
Mr. Dotcom and three others arrested in New Zealand appeared in
court Friday afternoon and were denied bail. Extradition proceedings
will continue Monday.
The police said the other three arrested in New Zealand were Finn
Batato, 38, a German citizen and resident; Mathias Ortmann, 40, a
German citizen who is a resident of Hong Kong; and Bram van der
Kolk, 29, a Dutch citizen who is a resident of New Zealand.
The police said they were still searching Dotcom Mansion on
Ira P. Rothken, a lawyer for Megaupload, said by telephone
Thursday that "Megaupload believes the government is wrong on the
facts, wrong on the law."
The arrests were greeted almost immediately with digital Molotov
cocktails. The hacker collective that calls itself Anonymous
attacked the Web sites of the U.S. Justice Department and several
major entertainment companies and trade groups in retaliation for
the seizure of Megaupload. …