Sun, Jan 22, 2012 - Page 5 News List

HK freezes US$42 million in raids on Megaupload

AFP, HONG KONG

Hong Kong customs officers have raided offices, domestic premises and luxury hotel suites as part of a worldwide FBI Internet piracy investigation into file-sharing site Megaupload.com.

One hundred officers took part in the raids on Friday that seized a large amount of digital evidence and uncovered about HK$330 million (US$42 million) in suspected crime proceeds, Hong Kong Customs and Excise said.

“The assets have been frozen in accordance with related ordinances. The operation is ongoing,” it said in a statement.

Officers raided hotel suites costing HK$100,000 a day equipped with high-speed servers and large TV screens that were suspected to be connected to the case.

Megaupload’s Web site was shut down on Thursday by US authorities, who accuse it of one of the largest cases of copyright theft ever.

Megaupload founder Kim Dotcom, also known as Kim Schmitz, is being held in New Zealand following a police raid there.

The 37-year-old German citizen, who has New Zealand and Hong Kong residency, was denied bail with three other men on Friday when they appeared in an Auckland district court.

New Zealand police seized luxury cars worth NZ$6 million (US$4.8 million) in a raid on Dotcom’s Auckland mansion.

The US Justice Department and FBI have indicted a total of seven people who they said were “responsible for massive worldwide online piracy of numerous types of copyrighted works, through Megaupload.com and other related sites.”

The accused allegedly generated more than US$175 million in criminal proceeds and caused more than US$500 million in harm to copyright owners by offering pirated copies of movies, TV programs and other content, according to a statement.

The Hong Kong Customs said it had been conducting a joint investigation with the FBI targeting the activities of the company since the end of 2010.

Megaupload itself is registered as a private company in Hong Kong, with an office in Wanchai district.

The dramatic raids came amid a fierce debate in the US over a proposed bill before US Congress aimed at cracking down on online piracy.

Critics say the new law would hand US authorities unprecedented powers that could impinge on the freedom of the Internet, and on Wednesday dozens of Web sites, led by Wikipedia, went dark in a rare protest.

In face of the criticism, US Senator Majority Leader Harry Reid Friday agreed to delay next week’s vote on the bill to allow more time for talks.

“We made good progress through the discussions we’ve held in recent days, and I am optimistic that we can reach a compromise in the coming weeks,” he said.

European Commissioner for Digital Agenda Neelie Kroes also criticized the planned US legislation, writing on Twitter that: -“Internet regulation must be effective, proportionate & preserve benefits of open net.”

“Speeding is illegal too, but you don’t put speed bumps on the motorway,” she added.

The prosecution of Megaupload, meanwhile, sparked a retaliatory cyberattack on the FBI and US Justice Department Web sites.

The two government sites were up and running again early on Friday after being shut down for several hours in the attack claimed by the “Anonymous” hacktivist group, which also briefly disabled music and recording industry Web sites.

Megaupload is popular with Hollywood celebrities and has been endorsed by music stars such as Kanye West.

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