Calling it “sensationalist rhetoric,” federal authorities took the offensive late Thursday for the second time in as many months to blast Megaupload for its contention that the authorities entrapped the now-shuttered file-sharing service.
Federal authorities 13 months ago seized Megaupload’s domains and arrested its chief executive Kim Dotcom and his top lieutenants for running what the authorities claimed was a massive and illicit file-sharing service that cost Hollywood studios and other content makers some $500 million.
Megaupload essentially contends that, at a minimum, federal authorities punished Megaupload for cooperating with the prosecution of rival file-sharing site NinjaVideo. At a maximum, Megaupload contends federal officials set up Megaupload for its downfall.
The controversy centers on Megaupload complying with a then-secret U.S. search warrant targeting five of its users, who were running their own file-sharing service using Megaupload’s infrastructure. Eighteen months before Megaupload was indicted in January 2012, Megaupload complied with the warrant and turned over a database on the 39 pirated movies detailed in the warrant that linked the files to the file-sharing service NinjaVideo, which was later indicted.
Though the feds had already begun quietly investigating Megaupload months before, in this case the government treated Megaupload as NinjaVideo’s internet service provider, and asked it to keep the NinjaVideo warrant quiet.
Despite Megaupload’s cooperation, the 39 infringing NinjaVideo files were later used against the popular file-sharing service (.pdf) as evidence to seize Megaupload.com domains and prosecute Dotcom and others connected to the site. That’s because Megaupload did not delete the 39 movies from its servers. The government used that fact to demonstrate that the company knew full well that its service was being used for piracy.
Megaupload attorney Ira Rothken said in a recent court filing that that “Megaupload had every reason to retain those files in good faith because the government had sought and obtained Megaupload’s cooperation in retrieving those files and warned that alerting users to the existence of the warrant and the government’s interest in the files could compromise the investigation.” (.pdf)
But federal prosecutors in Virginia, where the case is being tried, said in a court filing that there was ample evidence, beyond those files, presented in an affidavit to a federal judge to bring a case against Megaupload: (.pdf)
The affidavit noted infringing content was present on the website, see id. at ¶ 13, and included evidence of Megaupload’s awareness of infringing content on its own system by describing how members of the Mega Conspiracy had searched Megaupload databases in order to personally access infringing content. Id. at ¶ 13. The affidavit also stated, based on reviews of e-mails sent or received by members of the conspiracy, that Megaupload willfully ignored takedown notices regarding infringing content, and that members of the Mega Conspiracy had themselves uploaded infringing content to the website. Id. at ¶ 15. Finally, the affidavit stated that the various domains to be seized had been facilitated and promoted by the conspiracy’s illicit proceeds. Id. at ¶ 18. This was more than sufficient to demonstrate ‘a fair probability’ that the domain names were subject to forfeiture.
Last month, federal authorities said in court documents that Megaupload’s entrapment allegations were “baseless.”
Thirteen months ago, Dotcom and crew were arrested in New Zealand, where they remain free on bail awaiting an extradition hearing on whether they can be tried on criminal copyright and money laundering charges in a Virginia federal court. And last month, Dotcom unveiled a new file-sharing service, Mega, marking the one-year anniversary of his arrest.
Feds Say Megaupload Entrapment Claim Is 'Sensationalist Rhetoric'
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Feds Say Megaupload Entrapment Claim Is 'Sensationalist Rhetoric'
