File-sharing site Megaupload.com has been charged with running an international organised criminal enterprise, in what the US Justice Department describes as one of the largest criminal copyright cases in history.
The site generated more than $175m in criminal proceeds and caused more than half a billion dollars in harm to copyright owners, alleges the Justice Department and FBI.
A grand jury in the Eastern District of Virginia has charged the organisation with engaging in a racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering and two substantive counts of criminal copyright infringement.
If found guilty, Megaupload founder Kim "Dotcom", along with six other Mega members, will each face a maximum penalty of 20 years in prison.
The news comes just one day after major internet firms held a 24-hour protest over proposed anti-piracy laws.
Dotcom and three others have been arrested in New Zealand. Law enforcement also executed more than 20 search warrants in the US and eight countries, seized approximately $50m in assets and targeted sites where Megaupload has servers.
According to the indictment, Megaupload has operated websites that unlawfully reproduce and distribute infringing copies of copyrighted works, including movies – often before their theatrical release – music, television programmes, electronic books, and business and entertainment software on a massive scale for over five years.
Megaupload.com was advertised as having more than one billion visits to the site, more than 150 million registered users, 50 million daily visitors and accounting for 4% of the total traffic on the internet, said the Justice Department.
In response to the allegations against Megaupload, hacking group Anonymous is reported to have temporarily taken down six sites, including the Department of Justice site, and Universal Music Group, with a distributed denial-of-service attack (DDoS attack).
A lawyer for Megaupload told the Guardian newspaper it would "vigorously" defend itself against the charges, dismissing the criminal action as "a civil case in disguise".
Photo: liako on Flickr