The Mega empire: Details of the MegaUpload indictment

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The FBI moved Thursday to shut down MegaUpload.com and arrest four of its executives, including its founder Kim Schmitz. The feds are alleging criminal copyright infringement and racketeering, and the full indictment has already been posted online. Here are the most important and juicy details about the network of companies behind MegaUpload, as alleged by the Justice Department:

  • MegaUpload was primarily hosted in Virginia by a web hosting provider called Carpathia Hosting. Carpathia leased more than 1000 servers with a total of 25 petabytes of storage to MegaUpload.
  • MegaUpload had its second big data center in the Netherlands, where web host Leaseweb rented and hosted close to 700 servers for the company.
  • MegaUpoad users paid more than $110 million to the company via PayPal.
  • The MegaUpload imperium employed more than 30 people in 9 different countries.
  • The FBI and foreign authorities seized close to 60 bank accounts as well as various PayPal accounts.
  • Authorities also seized around 30 cars and motorcycles, including a number of Mercedes-Benz cars with novelty license plates like “STONED”, “GUILTY” and “MAFIA.”
  • MegaUpload founder Kim Schmitz allegedly owns 68 percent of Megaupload as well as its image hosting site Megapix.com and the affiliate site Megaclick.com. He owns 100 percent of Megavideo.com, Megaporn.com and Megapay.com. He made $42 million in 2010.
  • Mathias Ortmann, a long-time collaborator with Schmitz who was arrested on Thursday as well, owns 25 percent of the Mega empire. He co-founded MegaUpload and has been serving as the company’s CTO. Ortmann made $5 million in 2010.
  • The MegaUpload crew kick-started its Megavideo hosting site by copying videos from YouTube, and the indictment quotes from internal emails stating: Do we have a server available to continue downloading of the Youtube’s vids? … Kim just mentioned again that this has really priority.” Another email stated: “Kim really wants to copy Youtube one to one.”
  • Other emails show how executives discussed cash rewards for uploaders who had provided specific DVDs and other copyrighted works.
  • Further emails show how some of the executives scoured their own service to download copies of The Sopranos  and various music albums.
  • The indictment even includes chat logs with conversations between company executives, which include statements like: “we have a funny business . . . modern days pirates :)”
  • A MegaUpload programmer who was charged as part of the indictment uploaded multiple DVDs to the site.
  • Some of the emails show that MegaUpload had an interesting policy on when to follow take-down requests. When asked by Warner to take down files, the site’s CTO wrote in an internal email: “We should comply with their request — we can afford to be cooperative at current growth levels.”
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