'Dr Evil' arrested in FBI Swoop on $500m File-Sharing Website Megaupload

The FBI has closed down Megaupload, one of the world's largest file sharing websites. Prosecutors have charged its founders with racketeering conspiracy, money laundering and plotting to commit copyright infringement.

According to the FBI press release, Megaupload was running an international organised crime enterprise that cheated copyright holders for $500 million in revenue.

Seven people associated with the company were indicted earlier this month over the charges.

Among them, Kim Schmitz (also known as Kim Dotcom) and Kim Tim Jim Vestor, 37, who were arrested in New Zealand.

Other senior members of Megaupload's staff were taken into custody in nine countries including the US, Germany and Hong Kong.

Authorities seized $50 million in assets as part of the operation.

Established in 2005, the website offered a "one-click" upload, giving accessible online locker for shared content. Before its closure, the website had more than one billion visits to the site, more than 150 million registered users and 50 million daily visitors. It accounted for four percent of the total traffic on the Internet.

The justice department claims the website violated copyright law by illegally hosting and distributing movies, music and TV shows. "The indictment states that the conspirators conducted their illegal operation using a business model expressly designed to promote uploading of the most popular copyrighted works for many millions of users to download," reads the statement.

Before the shutdown, Megaupload released a statement calling the charges of copyright-infringement "grotesquely overblown".

In retaliation to the indictment, the hacker group Anonymous launched #OpMegaupload, one of the largest cyber-attack ever which temporarily took down the websites of the Justice Department, the Recording Industry Association of America, Motion Pictures Association of America and Universal Music.

"We Anonymous are launching our largest attack ever on government and music industry sites," announced a statement on Pastebin.

"Let's just say, for #SOPA supporters their #SOPAblackout is today," Anonymous tweeted.

According @YourAnonNews, an impressive 5,635 Anonymous members contributed to the site attacks. The group is also planning to attack WhiteHouse.gov, also targeted in 2011.

If found guilty of the charges, the Megaupload executives could face 50 years in jail. The indictment was handed down two weeks ago but was not disclosed until Thursday.

Media companies have always been at odds with Megaupload and other similar sites like Rapidshare and Mediafire, branding their legitimate uses as a veil concealing extensive copyright infringement.

Megaupload's founder, Schmitz, was nicknamed 'Dr. Evil' by Hollywood executives.

"It's really that inducement scenario that harkens back to the days of Napster," Owen Seitel of Idell & Sietel LLP, an entertainment and IP law firm, told Venture Beat. "I wouldn't be surprised if the site totally shut down and never came back."

The indictment came just a day after the protests in the United States over proposed SOPA, the Stop Online Piracy Act which would give federal authorities further powers to tackle foreign sites suspected of piracy. Google and Wikipedia, as well as hacker collective Anonymous, joined the protest by blacking out some content and releasing protest-statements against the laws.