New Charges Added to Megaupload Indictment

Feb 20, 2012 2:00 PM PST

ALEXANDRIA, Va. — Additional criminal charges have been levied upon operators of Megaupload, the cyberlocker site that U.S. authorities shut down last month and charged with copyright theft.

The new indictment adds more charges of criminal copyright infringement and wire fraud against Kim Dotcom and its employees.

So far, five of the seven people charged in the indictment have been arrested, and they have seized $50 million in assets, according to the Justice Department. Dotcom awaits extradition to the U.S. from New Zealand.

The new indictment includes additional material that  could help bolster the government's assertion that Megaupload was primarily used for downloading pirated material, not for legitimate file storage.

The Justice Department said in its superseding indictment that they found evidence that Megaupload had only 66.6 million registered users, despite prior claims in marketing materials by the site that it had some 180 million users. Moreover, authorities said that only 5.86 million of these users ever uploaded a file to the site.

Attorney Ira Rothken, who represents Megaupload, told the Wall Street Journal that nothing in the new indictment has changed his defense strategy.

"It appears as though the government is taking out of many petabytes of data things for their own optical effect," he said. "But those things are short on substance. At the end of the day, Megaupload strongly believes it is going to prevail."

Rothken, who has litigated scores of intellectual property cases for adult entertainment brands, including FriendFinder, Matrix Content, Penthouse and Voice Media, said that Megaupload's U.S. legal team was beginning to take shape, and now includes noted Washington, D.C., defense lawyer Thomas Green of Sidley Austin.

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