The FBI has busted the alleged operators of Internet locker service Megaupload, which had become one of the most popular video destinations on the Web, according to a statement from the U.S. Justice Department.
Seven people have been named in an indictment and four suspects have been taken into custody, according to a statement issued by the Justice Department. They have been charged in Virginia with crimes related to online piracy, including racketeering conspiracy, conspiring to commit copyright infringement, and conspiring to commit money laundering.
According to the Justice Department, the indictment alleges that Megaupload is led by Kim Dotcom, aka Kim Schmitz, a German with a colorful history who was once convicted of a felony but he has repeatedly denied engaging in piracy.
DotCom and three others were arrested in Auckland, New Zealand by New Zealand police, who "who executed provisional arrest warrants requested by the United States," the Justice Department.
Along with Dotcom, Kim Tim Jim Vestor, 37, a resident of Hong Kong and New Zealand was also arrested. Authorities say that Dotcom founded Megaupload and is the director and sole shareholder of Vestor Limited, which has been used to hold his ownership interests in the Mega-affiliated sites.
"This action is among the largest criminal copyright cases ever brought by the United States," the Justice department said in a statement. The arrests "directly targets the misuse of a public content storage and distribution site to commit and facilitate intellectual property crime."
In August, CNET profiled DotCom after he was sued by a porn studio for copyright violations and after film industry sources told me that Motion Picture Association of America (MPAA) had complained to law enforcement officials numerous times that Megaupload was getting rich by helping millions of people store and distribute pirated films and TV shows.