Seven executives charged as filesharing site shut down over accusations they cheated copyright holders out of $500m.
The US government has closed down one of the world’s largest filesharing websites, accusing its founders of racketeering, money laundering and presiding over “massive” online piracy.
According to prosecutors, Megaupload illegally cheated copyright holders out of $500m in revenue as part of a criminal enterprise spanning five years.
A lawyer for Megaupload told the Guardian it would “vigorously” defend itself against the charges, dismissing the criminal action as “a civil case in disguise”.
News of the indictment – being framed as one of the biggest copyright cases in US history – came a day after major internet firms held a 24-hour protest over proposed anti-piracy laws.
According to a Department of Justice release, seven people associated with Megaupload were indicted by a federal grand jury earlier this month over the charges.
They included Kim Dotcom, founder of the online firm.
The 37-year-old, who also goes by Kim Tim Jim Vestor and whose real name is Kim Schmitz, is accused of heading up a criminal venture that earn Dotcom and his associates upwards of $175m.
These profits were obtained illegally through advertising and the selling of premium memberships to users of Megaupload, the justice department is claiming.
Established in 2005, the website offered a “one-click” upload, providing an easily accessible online locker for shared content.
Before being shut down, the firm boasted 50 million daily visitors, accounting for 4% of total internet traffic, the justice department claimed in its statement on the indictment.