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Ccips.mega.Ss Indictment

Ccips.mega.Ss Indictment

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Published by: Michael A. Scarcella on Feb 17, 2012
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01/10/2013

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FILED
OPEN
COURT
IN
THEUNITEDSTATESDISTRICT
COURT
FORTHEEASTERNDISTRICTOFVIRGINIA
AlexandriaDivision
J6
zuiz
CLERK,
U.S.
DISTRICT
COURT
ALEXANDRIA.VIRGINIA
UNITED
STATESOF
AMERICA
Criminal
No.
1:12CR3
CountOne:18U.S.C.§1962(d)-ConspiracytoCommitRacketeeringCountTwo:18U.S.C.
§371
-
ConspiracytoCommitCopyright
Infringement
CountThree:18U.S.C.§1956(h)-
ConspiracytoCommitMoneyLaundering
CountFour:18U.S.C.§§2,2319:
17U.S.C.
§506-
CriminalCopyrightInfringementBy
DistributingaCopyrightedWorkBeingPreparedforCommercial
DistributiononaComputerNetwork
&AidingandAbetting
of
CriminalCopyrightInfringement
CountsFivethroughEight:
18U.S.C.
§§2,2319;
17U.S.C.
§506-
CriminalCopyrightInfringementBy
Electronic
Means
&
AidingandAbetting
of
CriminalCopyrightInfringement
Counts
NinethroughThirteen:
18U.S.C.
§§2,
1343-
FraudByWire&Aidingand
Abetting
of
FraudbyWire
v.
KIM
DOTCOM,
MEGAUPLOAD
LIMITED,VESTOR
LIMITED,
FINN
BATATO,JULIUSBENCKO,
SVEN
ECHTERNACH,MATHIAS
ORTMANN,
ANDRUS
NOMM,
andBRAMVAN
DER
KOLK,
Defendants
SUPERSEDING
INDICTMENT
FEBRUARY2012TERM-atAlexandria,Virginia
Case 1:12-cr-00003-LO Document 34 Filed 02/16/12 Page 1 of 90 PageID# 246
 
THE
GRAND
JURY
CHARGES
THAT:
GENERAL
ALLEGATIONS
AtalltimesrelevanttothisSupersedingIndictment:
1.
KIMDOTCOM,MEGAUPLOAD
LIMITED,
VESTOR
LIMITED,
FINNBATATO,
JULIUS
BENCKO,SVEN
ECHTERNACH,
MATHIASORTMANN,
ANDRUS
NOMM,and
BRAMVAN
DER
KOLK,thedefendants,andothersknownandunknowntothe
GrandJury,weremembers
of
the"MegaConspiracy,"aworldwidecriminalorganizationwhose
membersengagedincriminalcopyrightinfringementandmoneylaunderingonamassivescale
withestimatedharmtocopyrightholderswellinexcess
of
$500,000,000andreportedincomein
excess
of
$175,000,000.
2.Megaupload.comisacommercialwebsiteandserviceoperatedbytheMega
Conspiracythatreproducesanddistributescopiesofpopularcopyrightedcontentoverthe
Internetwithoutauthorization.SinceatleastSeptember2005,Megaupload.comhasbeenused
bythedefendantsandothermembersandassociates
of
theMegaConspiracytowillfullyreproduceanddistributemanymillionsofinfringingcopies
of
copyrightedworks,including
motionpictures,televisionprograms,musicalrecordings,electronicbooks,images,videogames,andothercomputersoftware.Overthemorethanfiveyears
of
itsexistence,theMegaConspiracyhasaggressivelyexpandeditsoperationsintoalargenumber
of
relatedInternetbusinesses,whichareconnecteddirectlyto,oratleastfinanciallydependentupon,thecriminal
conductassociatedwithMegaupload.com.
3.Megaupload.com
was
at
one
point
inits
history
estimatedtobethe13th
most
frequentlyvisitedwebsiteontheentireInternet.Thesiteclaimstohavehadmorethanone
billionvisitorsinitshistory,morethan180,000,000registereduserstodate,anaverage
of
Case 1:12-cr-00003-LO Document 34 Filed 02/16/12 Page 2 of 90 PageID# 247
 
50milliondailyvisits,andtoaccountforapproximatelyfourpercent
of
thetotaltrafficon
theInternet.As
of
January19,2012,therewereactuallyapproximately
66.6
millionusersregisteredintheMegaConspiracy'sinternaldatabaserecords;
of
theseregisteredusers,the
recordsfurthershowthat,atmost,only5.86millionusershadeveruploadedasinglefileto
eitherMegaupload.comorMegavideo.com.
4.Megaupload.com'sincomecomesprimarilyfromtwosources:premium
subscriptionsandonlineadvertising.PremiumsubscriptionsforMegaupload.comhavebeenavailableforonlinepurchaseforaslittleasafewdollarsperdayorasmuchasapproximately
$260foralifetime.Inexchangeforpayment,theMegaConspiracyprovidesthefast
reproductionanddistributionofinfringingcopiesofcopyrightedworksfromitscomputer
serverslocatedaroundtheworld.Premiumusers
of
thesite,asmallpercentage
of
theoveralluserbase,areabletodownloadanduploadfileswithfew,
if
any,limitations.Subscriptionfees
collectedduringtheexistence
of
theMegaConspiracyfrompremiumusersareestimatedtobe
morethan$150million.OnlineadvertisingonMegaupload.comanditsassociatedwebsites,whichisheavilydependentonthepopularity
of
copyrightinfringingcontenttoattractwebsite
visits,hasfurtherobtainedmorethan$25millionfortheMegaConspiracy.
5.Thefinancialproceeds
of
Megaupload.comhavebeenprimarilydirectedtofour
sources.
First,theConspiracyhasdirectedthebulkofitsrevenuestothedefendants,corporate
entitiestheycontrol,otherco-conspirators,andemployeesfortheircommercialadvantageandprivatefinancial
gain.
Second,theMegaConspiracyhasspentmillionsofdollarsdeveloping
and
promotingMegaupload.com
and
complementaryInternetsites
and
services,
such
as
Megavideo.com,Megaclick.com,Megaporn.com,andahostofothers(collectivelythe"Mega
Sites").Third,formuch
of
itsoperation,theMegaConspiracyhasofferedan"Uploader
Case 1:12-cr-00003-LO Document 34 Filed 02/16/12 Page 3 of 90 PageID# 248

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