File-Sharing Site Founder Home Raid Finds Millions in Cash and Cars
- Posted on January 20, 2012 at 10:36pm by
Liz Klimas
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The home of Kim Dotcom, founder of megaupload.com, in New Zealand was raided after his arrest.
WELLINGTON, New Zealand (The Blaze/AP) — New Zealand police raided several homes and businesses linked to the founder of Megaupload.com, a giant Internet file-sharing site shut down by U.S. authorities, on Friday and seized guns, millions of dollars, and nearly $5 million in luxury cars, officials said.
Police arrested founder Kim Dotcom and three Megaupload employees on U.S. accusations that they facilitated millions of illegal downloads of films, music and other content costing copyright holders at least $500 million in lost revenue. Extradition proceedings against them could last a year or more.
Watch footage posted by Russia Today of Dotcom in court and of the raid:
With 150 million registered users, about 50 million hits daily and endorsements from music superstars, Megaupload.com was among the world’s biggest file-sharing sites. According to a U.S. indictment, the site, which was shut down Thursday, earned Dotcom $42 million in 2010 alone. This action lead to the hacker collective Anonymous shutting down the Department of Justice website along with other industry sites (Related: Learn about the “new evil tactic” Anonymous used to conduct the attack on these sites.)
Although the company is based in Hong Kong and Dotcom lives in New Zealand, some of the alleged pirated content was hosted on leased servers in Virginia, and that was enough for U.S. prosecutors to act.
New Zealand police served 10 search warrants at several businesses and homes around the city of Auckland.
Police spokesman Grant Ogilvie said the seized cars include a Rolls Royce Phantom Drophead Coupe worth more than $400,000 as well as several Mercedes. Two short-barreled shotguns and a number of valuable artworks were also confiscated, he added.
He said police seized more than $8 million, money that was invested in various New Zealand financial institutions and which has now been placed in a trust pending the outcome of the cases.
New Zealand’s Fairfax Media reported that the four defendants stood together in an Auckland courtroom in the first step of the extradition proceedings.
Dotcom’s lawyer raised objections to a media request to take photographs and video, but then Dotcom spoke out from the dock, saying he didn’t mind photos or video “because we have nothing to hide.” The judge granted the media access, and ruled that the four would remain in custody until a second hearing Monday.
Dotcom, Megaupload’s former CEO and current chief innovation officer, is a resident of Hong Kong and New Zealand and a dual citizen of Finland and Germany who had his name legally changed. The 37-year-old was previously known as Kim Schmitz and Kim Tim Jim Vestor.
Two other German citizens and one Dutch citizen also were arrested and three other defendants – another German, a Slovakian and an Estonian – remain at large.
Megaupload has retained Washington power attorney Bob Bennett to defend it, according to a person inside the company. Bennett is best known for representing former President Bill Clinton during the Monica Lewinsky scandal. The person within Megaupload spoke on condition of anonymity because he was not authorized to discuss the company’s plans.
The Electronic Frontier Foundation, which defends free speech and digital rights online, said in a statement that the arrests set “a terrifying precedent. If the United States can seize a Dutch citizen in New Zealand over a copyright claim, what is next?”
The indictment was unsealed one day after websites including Wikipedia and Craigslist shut down in protest of two congressional proposals intended to make it easier for authorities to go after sites with pirated material, especially those with overseas headquarters and servers.
Before Megaupload was taken down, the company posted a statement saying allegations that it facilitated massive breaches of copyright laws were “grotesquely overblown.”
“The fact is that the vast majority of Mega’s Internet traffic is legitimate, and we are here to stay. If the content industry would like to take advantage of our popularity, we are happy to enter into a dialogue. We have some good ideas. Please get in touch,” the statement said.
Several sister sites were also shut down, including one dedicated to sharing pornography files.
News of the shutdown seemed to bring retaliation from hackers who claimed credit for attacking the Justice Department’s website. Federal officials confirmed it was down for hours Thursday evening and that the disruption was being “treated as a malicious act.”
A loose affiliation of hackers known as “Anonymous” claimed credit for the attack. Also hacked was the site for the Motion Picture Association of America, which has campaigned for a crackdown on piracy.
According to the indictment, Megaupload was estimated at one point to be the 13th most frequently visited website on the Internet. Current estimates by companies that monitor Web traffic place it in the top 100.
Megaupload is considered a “cyberlocker,” in which users can upload and transfer files that are too large to send by email. Such sites can have perfectly legitimate uses. But the Motion Picture Association of America estimated that the vast majority of content being shared on Megaupload was in violation of copyright laws.
The website allowed users to download some content for free, but made money by charging subscriptions to people who wanted access to faster download speeds or extra content. The website also sold advertising.
Megaupload was unique not only because of its massive size and the volume of downloaded content, but also because it had high-profile support from celebrities, musicians and other content producers who are most often the victims of copyright infringement and piracy. Before the website was taken down, it contained endorsements from Kim Kardashian, Alicia Keys and Kanye West, among others.
The company listed Swizz Beatz, a musician who married Keys in 2010, as its CEO. He was not named in the indictment and declined to comment through a representative.
The five-count indictment, which alleges copyright infringement as well as conspiracy to commit money laundering and racketeering, described a site designed specifically to reward users who uploaded pirated content for sharing, and turned a blind eye to requests from copyright holders to remove copyright-protected files.
For instance, users received cash bonuses if they uploaded content popular enough to generate massive numbers of downloads, according to the indictment. Such content was almost always copyright protected, the indictment said.
The Justice Department said it was illegal for anyone to download pirated content, but their investigation focused on the leaders of the company, not end users who may have downloaded a few movies for personal viewing.
A lawyer who represented the company in a lawsuit last year declined to comment Thursday. Efforts to reach an attorney representing Dotcom were unsuccessful.
Although Megaupload is based in Hong Kong, the size of its operation in the southern Chinese city was unclear. The administrative contact listed in its domain registration, Bonnie Lam, did not respond immediately for a request for comment sent to a fax number and email address listed.
The indictment was returned in the Eastern District of Virginia, which claimed jurisdiction in part because some of the alleged pirated materials were hosted on leased servers in Ashburn, Virginia. Prosecutors there have pursued multiple piracy investigations.
The Justice Department also was investigating the “significant increase in activity” that disrupted its website. It said in a statement that it was working to “investigate the origins of this activity, which is being treated as a malicious act until we can fully identify the root cause.”
The site appeared to be working again late Thursday. A spokesman for the Motion Picture Association of America said in an emailed statement that the group’s site also had been hacked, but it too appeared to be working later in the evening.
“The motion picture and television industry has always been a strong supporter of free speech,” the spokesman said. “We strongly condemn any attempts to silence any groups or individuals.”





















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Comments (81)
DanielBurke
Posted on January 21, 2012 at 12:52pmObama-Holder Injustice Dept is doing this to placate Obama’s Hollywood donors, period, end of story.
Report Post »Socialism_Is_The_New_Black
Posted on January 22, 2012 at 4:51amThat was the first thing I thought of also.
Report Post »Anarchy_in_the_USA
Posted on January 23, 2012 at 10:38pmBut if he was Kim-fa-nizzle-my-shizzle, the racist DOJ would have not batted an eye.
But was it really about copyright infingement? Doubtful, there is wayyyyy more pirated “stuff” on YouTube, but since Google is in bed with Obama, no worries.
Report Post »BuddyT
Posted on January 26, 2012 at 4:50pmYou make a good point! That is probably as good of an explanation as it gets.
Report Post »Chris2
Posted on January 21, 2012 at 12:37pmI posted this on the Brietbart. Its a decent rundown on why it all happened, and yes I provided links.
I can’t really hate them for this one. Megaupload’s vast majority of file were all legit and many people used it as a cheap cloud server for their businesses. They also had a huge staff of just over 200 people tying to look at all their files in real time to delete copyrighted content.
This whole thing happed after they got some celebritys to create a song about it. Since a few people in the video winds up having an exlucsivity contract with Unviersal (Video here: http://www.youtube.com/watch?v=pCkI5I8vsBg) they got into one of their fits and said it belonged to them. A false DCMA claim was reported and a judge gave Universal to explain why they owned that song, if they didn’t they would face stiff fines and pay megaupload crap ton of cash (story here http://arstechnica.com/tech-policy/news/2011/12/j...
They got pissy like all old media types they filed a crap ton of complaints to the DOJ and they acted. A good summation of why the DOJ and RIAA got into this is here http://arstechnica.com/tech-policy/news/2012/01/w...
Seeing as Megaupload had a division dedicated to taking down copyrighted material and how this shows just how much the old media is in bed with the government I have to say the more I read about why Anonymous attacked government sites, the more I support them on this issue.
This is only a fraction of what is to come if SOPA and PIPA pass.
A
Report Post »Lemmy
Posted on January 30, 2012 at 12:06pmtl;dr
Report Post »Ghandi was a Republican
Posted on January 21, 2012 at 10:55amWE Already have laws against Piracy.. Selective enforcement is a worse crime. It is corruption and i cannot wait to see an AG appointed who will top-down the elites! If existing laws were enforced we could do away with 90% of them! Who are the pirates?
Report Post »V-MAN MACE
Posted on January 21, 2012 at 11:30amIt’s not illegal to have cash, luxury cars, or guns.
So what are the Feds doing? They shut down the entire site over one person doing something illegal. The same way they beat and assault all the protestors for one person tossing a rock or something (who happens to be one of them in disguise as a protestor).
This is how they’re going to shut down the entire United States. One false-flag terrorist attack perpetrated by THEM, everything is shut down. Everyone is supect. Everyone’s rights are trampled. It’s an excuse. This is what they WANT.
THEY are the ones who mandate that backdoors be built into everything so that THEY can pirate personal information and datamine in general.
THEY are the pirates.
THEY are the hackers.
THEY are the ones creating viruses and infecting systems.
THEY ARE THE FEDS.
Abolish the Federal Reserve and defund them all at once.
Ron Paul 2012. For freedom.
Report Post »wrazzlin1
Posted on January 21, 2012 at 9:45amTo me copyright infringement is a civil crime and should be pursued by the wronged parties in civil actions. Its not the Govt job to inforce this.
Report Post »Eleutheria
Posted on January 21, 2012 at 10:58pmIndeed.
Report Post »fuzzy20841
Posted on January 21, 2012 at 8:39amI do believe piracy is stealing . What I object to is the intensity and speed with which these cases are prosecuted. Our government in league with the Hollywood slime wants to make bigger cases against piracy than most other crimes. Not a cent goes unturned so that these no talents can use (paid for) entire floors of hospitals for their kids birth. It’s a shame that Hollywood types can reach super rich status at the same time producing garbage without substantially creating jobs or economically strengthening this nation!
Report Post »ares338
Posted on January 21, 2012 at 8:34amHe doesn’t have near as much money as Soros, so go confiscate his stuff too.
Report Post »rukdnme13
Posted on January 21, 2012 at 8:34amIf only the government were as aggressive in searching out and prosecuting the thugs who ran “fast and furious” Pay no attention to the man behind the curtain!
Report Post »I.Gaspar
Posted on January 21, 2012 at 9:40amBut the gov’t is investigating Fast and Furious. Their investigation is known as Slow and Apathetic.
Report Post »DD313
Posted on January 21, 2012 at 12:55pmI thought it was a coverup called Fool the Curious.
Report Post »Rob
Posted on January 21, 2012 at 8:26amBig Brother
Report Post »DD313
Posted on January 21, 2012 at 7:19amIf the government is able to seize everything related to an alleged online criminal enterprise, why doesn‘t it seize this guy’s last name and make him change it back to whatever it was before?
Report Post »Wolf
Posted on January 21, 2012 at 10:07amRomneycare is the last person I’d vote for even if he was running for turd catcher at the city septic tank.
Report Post »alina.bolero
Posted on January 21, 2012 at 6:26amDotcom? Really? Why not just change your first name to “Megaupload” at that point? *eye roll*
This was OBVIOUSLY timed to coincide with the SOPA and PIPA votes.
I would love to see an accounting of how they figure there was $500M in lost revenue. No doubt they are calculating the full list price of each download. What they fail to consider is that a vast majority of people that downloaded either would not, or could not, purchase the item directly. My guess would be that maybe 1% of the people that downloaded did so in leu of actually purchasing the item. So, when we examine the precedent set by this international tribunal “in bed” with the Hollywood elite, and the ramifications of future seizures and regulations designed to alleviate the need for industries to file specific suites, for specific actions, against specific people, let us do with the knowledge that this action REALLY only potentially gained the industry about $5M a year.
Let’s see … the entertainment industry is 5% of GDP of $15T which is $75B. So, shutting down Megaupload will increase revenue by … lemme see … $5M/$75B = 0.00006 or 6/1000ths of a percent.
Are we starting to see now how this has NOTHING to do with revenues lost from violation of intellectual property rights?
Report Post »spasm
Posted on January 21, 2012 at 8:02amI bet their profits just dramatically increased now that megaupload is shut down…… (sarcasm) just in case…
Report Post »tirepitstop
Posted on January 21, 2012 at 11:38amDotcom…?
Report Post »That couldn’t be his real last name…..??
But,….I do know a Sharron Peters…..
evaluator
Posted on January 23, 2012 at 7:27pmAlena, Make that 6/100,000. .006 is 6/1000, 0006 is 6/10,000, so .00006 would be 6/100,000 (I think) It’s really a small percentage!!
Report Post »ohiochili
Posted on January 21, 2012 at 5:14amIf only our government enforcers were as effective regarding Wikileaks.
Then again, Hollywood is so much more important than our national security.
Report Post »txn4justice
Posted on January 21, 2012 at 3:34amInteresting, interesting, interesting. Meanwhile important anti-piracy websites will probably continue to be taken down because the kids are smarter than the adults in the cellphone/computer/internet world.
This scenario is more wide spread than is being talked about in most of the media. There are a lot of individual news stories and “the dots” are not being connected about how unsecure we really are. False confidence is an enemy to be feared.
Becareful people. “It is a dog eat dog world out there and we all are wearing porkchop underwear.“ That was a paraphase stolen from ”Norm” on the sit-com Cheers. But it works for these internet issues.
Report Post »richard the lion-hearted
Posted on January 21, 2012 at 3:51amI thought it was ‘Milkbone’ underwear…
Report Post »txn4justice
Posted on January 21, 2012 at 5:55amMight be “Milk-Bone”, oldtimers disease is starting to kick in now, ………what, ……..Oh yeah, Welcome to Walmart!
Report Post »stage9
Posted on January 21, 2012 at 2:45amWe can only hope that this brings a quick and swift end to hollywood as we know it and with it the vileness and putrid filth it produces.
Bu-bye.
Report Post »richard the lion-hearted
Posted on January 21, 2012 at 3:45amI look at it like this, you buy a computer and you use it, what‘s available through it in your home is nobody’s business. Kind of like no speeding but it’s pefectly legal to sell cars that go over the speed limit, or all the various software you can buy that lets you record off of the internet that’s perfectly legal to sell. How about those cassette recorders, VCR recorders, DVD recorders that are perfectly legal to sell? What do you think people have used those for all these years?! This is selective favoritism through government law thugs who never address the issue of Sony, just for one example, who produces movies yet sell DVD burners, anyone catching on? If it‘s available in your home you didn’t steal anything, they have no problem not protecting us from unwanted filth that shows everywhere on the internet, or the fact that business’s, banks, credit card companies, web sites offer no recourse and take NO responsibility when YOUR personal information is stolen online from a third party or sold by the very same companies without your consent. All you “Well it’s the law“ musheads need to start asking yourself ”What if the laws are wrong?!” And why you would back BIG BROTHER, and BIG CORPORATE GREED over the individual.
Report Post »lionshield
Posted on January 21, 2012 at 1:44amhey, did I see elvis’s pink-cadic-car being towed? wow!
Report Post »BurntHills
Posted on January 21, 2012 at 1:41ambased on AMERICAN accusations the NWO Gestapo overseas raided this businessman’s home?! no doubts left here what obama is doing. let’s pray the muslims take offense.
Report Post »Wolf
Posted on January 21, 2012 at 10:11amRight on the mark: we‘re not only the world’s police force now, we’re writing its laws. Something isn’t quite right with this picture. Of course, we’ll soon be following pure sharia law and…
Report Post »MrKnowItAll
Posted on January 21, 2012 at 1:19amI saw Elvis in the window.
Report Post »SurfinRallylizard
Posted on January 20, 2012 at 11:48pmIf they just streamed shows and movies online instead of play games with consumers there wouldn’t be a market for pirated software. The networks and their combined efforts with companies like DirecTV and Comcast are the real crooks of these industries. Lots of people don’t own TVs anymore, put your content on the internet, add commercials, whatever… why are all NFL games and all TV shows not aired on the internet when they are on TV??? Because the networks are incompetent and greedy… thats why. Screw consumers? They will download it and stream it elsewhere, go eff urselves.
Report Post »A Conservatarian
Posted on January 20, 2012 at 11:47pmWas anyone still curious if the NWO exists or not?
Report Post »RightThinking1
Posted on January 20, 2012 at 11:42pmMy goodness. There seems to be much outrage from folk who were/are availing themselves of other people’s property without paying for it. I am a simple person, and hold to the simple perspective that there are two categories where ‘things’ are concerned; those which ARE mine, and those which are NOT mine. I suppose it is tiresome for some, but I genuinely believe that is one of the bases of civilized society. Call me old fashioned.
Report Post »richard the lion-hearted
Posted on January 21, 2012 at 3:57amWrongthinkingtoo…puppet.
Report Post »2012hey
Posted on January 21, 2012 at 2:03pmYou need to get with the program – this was not piracy – this is what is called Cloud Computing – people have very large servers with space and people can store their files there. The storage area in the “cloud” is still the private property of the owner of the storage even if it is on remote servers. This is like saying – if someone has antiques in a storage locker they stole it!
Report Post »Eleutheria
Posted on January 21, 2012 at 11:04pmAdmitting you are simple is the first step to eliminating the malady of ignorance.
Report Post »sodacrackers2
Posted on January 23, 2012 at 5:58pmYou can kiss civilized society goodbye if O gets four more years. Civilized society to the leftists is responsible for all the suffering in the world. The uncivilized are our victims, who must be compensated.
Report Post »ChristmanWalking
Posted on January 20, 2012 at 11:37pmHave Any of you written a book, a song, a movie… would you not want to be paid for your work.
This is theft…!
Unless you who think it‘s Cool didn’t write it…Then you would Scream Your Head Off!
Come on… Stealing is Stealing… OR, if you invented the tire you would just say, Hey, everyone just steal the idea… ?
Report Post »richard the lion-hearted
Posted on January 21, 2012 at 4:10amAnd I’m sure that you CHRISTMAN(T)ALKING never used a cassette recorder or VCR recorder, or a DVD burner hmmm? Get your proverbial head out of your (you know what), they are the same companies who sell the software and hardware to do just what they hypocritically say you can’t use, including the computers themselves that have the technological ability to do this right from the box.
Report Post »spasm
Posted on January 21, 2012 at 8:15amI know, its almost like if an author writes a book and gets paid for it being published but then hundreds if not thousands get to read their book for free without them getting any money for it. the nerve of those libraries.
almost like the radio, I can not believe every time a song that some one owns is played the artist does not have money falling from the sky from that radio station. AND do not get me started about the television and actors…
Report Post »Chris2
Posted on January 21, 2012 at 12:46pm“This is theft…! ”
It’s not theft, it’s copying. Theft leaves the original owner bereft of what was stolen.
Megauploads money didn’t come from the selling of files. It came from premium subscriptions and advertisements.
Finally he has (had) a staff of just over 200 that was dedicated to wiping copyrighted material off of there networks.
He did his due diligence. He didn’t steal anything, made no money off of the files in question and spent lavishly on an anti-piracy task force. This is just the RIAA getting anally devastated that their largest singers did advertisement for it. (youtube video to the megaupload.com song is in my post on the subject).
Report Post »blaze7c
Posted on January 21, 2012 at 1:06pmChristianmanwalking,
Report Post »Why is it the job of the feds to stop this? These are for-profit companies that make huge amounts of money. Why do we all have to pay for hollywood’s incompetencies? The government has no business doing this. Yes, it might be stealing, but that is between the parties involved. It begins with this stuff, but where does it go from here?
2012hey
Posted on January 21, 2012 at 2:07pmHey ID IOT – all of you who think MegaUpload is helping people steal are CLUELESS. This is remote file STORAGE. The files stored there belong to the owners of the storage. MegaUpload is not responsible for what people store there PERIOD. Regardless of that, they DID try to make sure no copyrighted material was stored on their servers but ultimately, this is like the Feds going after the owner of Extra Storage because someone stored something illegal inside their LOCKED storage locker.
With that being said – this is why I will NEVER use remote data storage… Cloud Computing is a BAD idea in my mind – too easy for people to steal or see your private data.
Report Post »CulperGang
Posted on January 21, 2012 at 9:17pmLike I said……..my parents “shared” VINYLS all the time IN the 50′s. NO DIFFERENT. Once they bought the record they had freedom to do what they liked with it. In the 70s it was the cassettes that could be duplicated and it was nobodies business, because the cassette was yours.
Report Post »Now the Music/Movie industry wants to tell YOU that you cannot share what you own…..because they want to milk the same cow over and over. DVD? hey if I want to allow my nephew to copy what I paid for IT IS MY BUSINESS!!!
Statistics have shown that file sharing DOES not reduce profits.
Captain Crunch
Posted on January 20, 2012 at 11:35pmAnd I bet he made all his money by selling pirate dvds on the street corner, traded copies of mp3′s for the paintings, and ink cartridge refills for the cars. All that money is HIS! Not the governments’.
Report Post »This is what all you people who are defined as “rich” have to look forward to.
CulperGang
Posted on January 22, 2012 at 1:00pmand you accept this as your future from the government??? think of how you want to see the future of your government.
Report Post »JQCitizen
Posted on January 20, 2012 at 11:22pmThis has to be a joke? A guy who founds an internet enterprise and his name is Dotcom?
Report Post »Chris2
Posted on January 21, 2012 at 12:39pmHe changed his last name when he first started Megaupload as a publicity stunt. It worked, his name was originally Kim Shmitz
Report Post »Detroit paperboy
Posted on January 21, 2012 at 1:36pmhe legally had his name changed, it used to be Jack MeHoff……
Report Post »Suchiazski
Posted on January 20, 2012 at 11:17pmWhelp, there goes the ability to watch shows online that I missed when they were on TV. I sure was hurting a lot of people in doing so, so it’s probably for the best. At least I’m not the literally egg-headed founder of megaupload, though.
Report Post »Pontiac
Posted on January 20, 2012 at 11:02pmYou can’t stop digital piracy. PERIOD. They are simply creating a larger bureaucracy to funnel more tax dollars into political coffers with the promise of maintaining their outrageous bureaucratic salaries.
Report Post »Detroit paperboy
Posted on January 20, 2012 at 10:52pmOur Criminal Federal Government is on the march… And i never thought i would say this , but i now know why the rest of the world hates us…. Iran is not the threat to our liberty… DC IS !!!!
Report Post »Radical Conservative
Posted on January 20, 2012 at 11:06pmIran is stills threat too… Let’s not get crazy here.
Report Post »ConservativeCharlie
Posted on January 20, 2012 at 11:11pmI dont lose sleep over Iran any longer.
Report Post »richard the lion-hearted
Posted on January 21, 2012 at 4:18amIran and many other things that can be traced right back to corrupt government…
Report Post »blaze7c
Posted on January 21, 2012 at 1:10pmRight on, the government here does more to hurt us here than any other country could do to us. The bad thing is that most people will just smile and accept it in the name of “national security”.
Report Post »Utahcatholic
Posted on January 21, 2012 at 11:07pmI firmly believe we are witnessing an out-of-control, rogue, tyrranical government with Obama as the manchurian puppet head. This administration, the justice dept, law enforcement, the TSA, Homeland Security, the EPA and the envirocrazies are fast destroying the liberty that so many souls gave their blood to win over hundreds of years.
I too am realizing why much of the world hates America…………….God help us.
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