We Read the Megaupload Indictment Papers So You Don’t Have To

By Patrick McGuire

In less than 24 hours, Megaupload has gone from the world's largest broadcaster of pirated material to the most interesting criminal case in US digital law. Megaupload's seizure came just a few hours after the news broke that its CEO was Swizz fucking Beatz, leaving the world's head spinning as it struggles to figure out how the guy who left his lady for Alicia Keys and produced this DMX song was at the head of a piracy ring.

Almost immediately after Megaupload was shut down, Anonymous responded by crashing the websites of the FBI, MPAA, RIAA and Universal Music Group. A lot of people in "the media" have been talking about the case today, but no one seems to have taken the time to read through the leaked 72-page US government document regarding the indictment. What with Megaupload down, we had nothing better to do so we read the whole thing cover to cover. Here are the juicy details:

- The indictment points to "popular linking" sites that help drive traffic to Megaupload. They name Ninjavideo, but Icefilms is never mentioned. How old is this thing?

- Elite employees at Megaupload had access to an unadulterated search engine of Megaupload's contents. That is fucking awesome.

- Once Google realized what Megaupload was up to, they pulled all of their Adsense ads. Megaupload responded by developing their own advertising network called Megaclick.

- The DMCA compliant tool Megaupload had installed to help major US institutions pull copyrighted files from Mega servers was, of course, flawed. If a user uploaded something like, say, The Hangover, Megaupload would search its servers for a matching file. It would delete the link submitted despite knowing about tens or hundreds or even thousands of other links to the same file. Basically it was a super clever fuck you to the copyright holder.

- The US government is clinging to evidence that Megaupload's owner, Kim Dotcom, shared the song "Nah" by 50 Cent featuring Mobb Deep in 2006. Seriously. This is one of their major claims. "On or about December 3, 2006, KIM DOTCOM distributed a Megaupload.com link to a music file entitled “05-50_cent_feat._mobb_deep-nah-c4.mp3." He is also accused of having a really fucking stupid name.

- Kim is a resident of Hong Kong and New Zealand. He is also a citizen of Finland and Germany.

- According to the US government, Kim made $42 million off of Megaupload in 2010.

- Megaupload has servers in Virginia, DC, California, and Toronto.

- $110 million has flowed through Mega's Paypal account since 2006.

- Megaupload sought to download and re-upload all of YouTube's content onto its own site, Megavideo, to mask the pirated content that lurked beneath its front page.

- "Mega Conspiracy has paid more than $65 million to hosting providers around the world for computer leasing, hosting, bandwidth… Mega Conspiracy affirmatively chose to financially reward specific uploaders of infringing copies of copyrighted content."

- Private emails between Megaupload employees make it very clear that they were were running an illegal operation but didn't really care. In one exchange, an employee wrote, “We have a funny business... modern days pirates :)” to which another responded, “We’re not pirates, we’re just providing shipping services to pirates :)”

- Thanks to their rewards program for loyal uploaders, they paid out 55k to a user who had 5,845 files of Vietnamese content, at least 10 DVD rips, some porn, and (what looked like) an Italian TV series.

- Megaupload was paying Carpathia, their Virginia-based hosting company, between $700,000 and $1 million per month from a bank account in Hong Kong.

- Cogent Communications, an Atlanta-based ISP, was making a steady $1 million per month from May 2009 until February 2011.

- Megaupload spent $2.4 million on yacht rentals in June 2011 alone.

- The US government is after $175 million in assets, including 59 different bank accounts. Many of them Chinese. Two are from Citibank.

- The US is looking for at least 14 Benzes, a Predator statue, two 108 inch TVs, a Seadoo, a 1957 Cadillac, a Maserati, and a Mini Cooper.

-Kim owned a Rolls Royce Phantom with a license plate that read "GOD." Some of the tags on his other cars included: GUILTY, STONED, GOOD, CEO, MAFIA, and HACKER.

Ultimately, what we can learn from this whole Megupload fiasco is that, yes, Mega was completely aware they were running a criminal operation. They made a gigantic amount of money and it will certainly go down as one of the most insane digital operations ever. Unfortunately, its timing around the SOPA controversy will probably function as a severe detriment to the freedom of the internet, but only time will tell. For now we can only marvel at the legacy of a man who built a multi-million dollar fortune off of DVD rips.

UPDATE: The Fader is now reporting Swizz Beatz was not Megaupload's CEO, and was "never involved in any meaningful way." 

@patrickmcguire

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