The indictment, which caps a two-year investigation, was handed up by a grand jury in the Eastern District of Virginia. Charges included criminal copyright infringement, racketeering and money laundering.
Law enforcement officials executed more than 20 search warrants in the United States and eight other countries and seized about $50 million in assets. They targeted sites where Megaupload has servers, including two local companies — Carpathia Hosting in Ashburn and Cogent Communications in the District — as well as others in the Netherlands and Canada, the officials said. The U.S. District Court in Alexandria also ordered the seizure of 18 domain names associated with the alleged conspiracy.
Ira Rothken, an attorney for Megaupload, denied the charges and said the company would “vigorously defend itself” in a criminal case, adding that “we believe we will succeed.”
He said that the Hong Kong-based company was surprised by the indictment and that it had never been contacted by the FBI to defend itself.
“There was a complete lack of notice and opportunity to be heard by Megaupload, and therefore that raises serious due process concerns that the government could shut down an entire series of Web sites without a court hearing either side,” Rothken said.
Sen. Patrick J. Leahy (D-Vt.), the lead author of the anti-piracy bill called the Protect IP Act (PIPA), praised the Justice Department’s actions.
“Today’s action by the Department of Justice against the leaders of Megaupload.com shows what law enforcement can do to protect American intellectual property that is stolen through domestic Web sites,” Leahy said.
But opponents of the anti-
piracy bills — PIPA in the Senate and the Stop Online Piracy Act (SOPA) in the House — were alarmed about the agency’s actions.
Markham Erickson, head of NetCoalition, a group that represents Google, Facebook and eBay in lobbying against the legislation, said the FBI’s seizure of sites may not be giving online companies due process. He said he fears the bills could make it even easier for law enforcement to get permission from the courts to shut down sites.
Casey Rae-Hunter of the Future of Music Coalition, a group that represents artists and has fought against the bills, said the indictment raises the question of whether legislation was needed “if law enforcement can go ahead and seize this site.”
Barrett Brown, the Dallas-based founder of an online think tank that works with Anonymous, confirmed in a telephone interview that the hacker group was aiming to take down Web sites by bombarding them with an overwhelming amount of traffic.
Brown, who said he is a former journalist working on a book about Anonymous, said the hackers are devising a new attack against Democratic members of Congress who are still endorsing the legislation.
“We’re trying to decide if we’re going to target one Congress member first or warn them first,” he said. “Another method would be to go after their donors, too.”
Brown added that Anonymous hackers might also figure out a way to ensure that the names of certain lawmakers would be linked to their support of SOPA.
Brown said, “We have means to tie someone’s name to something forever using search engine optimization.”
Staff writers Ed O’Keefe, Ellen Nakashima, Ian Shapira, Julie Tate and Hayley Tsukayama contributed to this report.