Another Error By US Officials May Kill Megaupload Prosecution

from the another-error dept

The number of significant mistakes by law enforcement in the Megaupload case continues to grow, with the latest one being a big one. Apparently, the US judge on the domestic part of this trial has noted that a pretty big problem with the case may mean the trial never actually moves forward at all. You see, you have to actually serve criminal charges, but US officials never served Megaupload — and due to some specifics, the concern is that Megaupload can’t actually be served as a foreign company. So, due to procedural rules, the judge in the case is warning US officials that they may have a significant (to insurmountable) hurdle in actually bringing any case forward. Oops. This is becoming a huge comedy of errors.

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Comments on “Another Error By US Officials May Kill Megaupload Prosecution”

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:Lobo Santo (profile) says:

*Mission Accomplished*

It’s not as though the US ever cared about bringing criminal charges–they just wanted to terrorize, oop, I mean “scare straight”–all of the file locker sites on the intertubez.

And it worked. The climate of fear has pervaded the varied file lockers which remain; all of them scared they’ll be raided by ‘special forces’ (or some such) and shot with beanbags rounds, dragged out of their house and shipped to the US just so they can not answer to farcical charges.

I do not believe “justice” was ever the point of the MegaUpload raid, it was terror.

Personally, I don’t negotiate with terrorists.

Kenneth Michaels (profile) says:


There are some pieces to the puzzle missing from the news reports. From what I’ve read, Megaupload corporation has not been served but the seven individuals were served. The seven individuals may still be extradited if they acted in criminal conspiracy, which would bring 5 years in jail needed for extradition.

Which just made me think of something. 5 years in jail needed for extradition from NZ. Hmmm. Is that typical? Wasn’t that part of SOPA – raise the criminal penalty to 5 years for streaming? They must have probably chose 5 years so they could make it an extraditable offense under extradition treaties?

That Anonymous Coward (profile) says:


Yeah its not like Mega was working on an IPO right before the raid happened…oh wait…

Mega let them kill 2 birds with 1 stone.
– Scare the cyberlockers, because their super secret we know your a thief tech can’t track those users. 6 Strikes wasn’t easy to get into place, and cyberlockers undermine it completely.
– Stop Dotcom from opening the music selling service. Taking a flat 10% from each sale and not having a voodoo laden contract to get money for years and years afterwards is a huge threat to the entrenched music dinosaurs. Given the brand recognition Mega had it could have drawn new artists there rather than letting them slave away for the labels.

Several of the more hysterical charges that would be impossible to prove from the indictment all had 5 year possibilities to make sure they had covered their bases with the NZ extradition treaty.

7 individuals do not “own” the servers, Mega does.
The majority of the assets seized are property of the corporation, who can’t be served it appears. It appears to be a foolish attempt to endrun not being able to serve a foriegn corporation by claiming Mega itself was the conspiracy…

The “criminal conspiracy” includes charges of “laundering money”… they took in subscription fees and advertising payments and did the most horrible thing… they paid their server bills. This was called laundering money.

The “criminal conspiracy” is accused of causing billions of dollars of losses to the **AA’s membership, except there is no actual proof of these losses and if they used any previous published study showing losses they will be laughed out of court as every study so far with these huge numbers has been shown to be a comical farce.

Anonymous Coward says:

This made me chuckle a bit.

If the “criminal conspiracy” was the mega corporation, and if mega can’t be charged as a foreign company, then where is the criminal conspiracy? How is something “criminal” when it is deemed untouchable by US law?

(not a law expert, and no sarcasm in those questions. Seriously wondering that, if anyone cares to explain)

Joe (user link) says:

From the NZ Herald article

Lawyers acting for the US have said they will argue Dotcom should be extradited because he was a member of an organised criminal group, which carries a sentence of five years.

The US Government needs to get over the hurdle of a five-year jail sentence to meet the criteria for extradition. Copyright charges in NZ carry a maximum of four years

So I’m guessing that means there’s going to be a huge amount of pressure on NZ to ratchet up the copyright sentencing guidelines to make things easier for the US in the future.

flubaluba (profile) says:

love it

I can’t get rid of this massive smile on my face now , what a wonderful end to the week, and the beginning of a wonderful weekend.

Just wondering if the US government will still support the RIAA and cohorts if they have to pay a few billion in loses to mega. Damn good news this. Well not for the American taxpayer , but for the rest of us , very very good news.
And if anything this should encourage cloud services to move out of America and into safe havens where they might also make a few billion if the RIAA comes after them.

That Anonymous Coward (profile) says:

and now we know...

Having the data destroyed accomplished many thing.
– It allowed the 47(?) GB of data they extracted be the only “evidence” of what was in the 25 PB of data on the servers.

– It destroyed peoples trust in cyberlockers. People would be less likely to use them knowing they could be wiped clean, and a court wouldn’t care.

– Even when they wheels came off, it meant the recovery of Mega as a brand would be made that much more difficult.

– It kept people focused on how much was there, instead of questioning how the US obtained internal email and calls from the foriegn corporation.

The downsides included…
– DoJ looking like morons after claiming Child Porn on the servers and not wanting to investigate.

– The look of the Government willing to violate an accused right to a fair trial.

– Removed the contents of the server from being used in a civil lawsuit brought by the **AA’s, which I am sure was a consideration in this case being started.

The Government has been caught lying in these types of cases before – DaJaz1 and the Spanish site they took down as being infringing then refused to release information to the lawyers for the accused, and lied to the Judge and media about the owners actually trying to reclaim their property.

Many of the people in DoJ are former **AA or similar special interest group employees. They have thrown the law out the window to pursue vendettas against those these organizations claim are robbing them blind based on evidence of questionable nature.

That One Guy (profile) says:


Free speech means free for all sadly, even those who make a 5-year old look mature, so no matter how much of a moron a commenter may be, I’d still say they have a right to post, as long as they aren’t posting things like threats and whatnot.

For example(and just to make it clear, these aren’t aimed at anyone):

“You’re a crap filled flesh-sack.” is offensive, but ultimately harmless.

“I’m going to come to your house and…” on the other hand is something that shouldn’t be allowed, as it implies actual harm.

Now that said, they may have their free speech, but everyone else also has the right to just click ‘report’ and block anything that’s too offensive, which seems like a good compromise.

That Anonymous Coward (profile) says:


You seem very vested in the idea that Mike is gay. Is this the result of your unrequited attempts to make Mike something he is not so he could fulfill your deepest desires?

While I applaud you on finding your way out of Narnia and that deep closet Mr. Santorum, this really is the wrong way and the wrong forum for you to act on your confusing feelings.

Anonymous Coward says:


I think the issue is with the corporate defendant. Since there’s no person to arrest, they give notice. But with the individual defendants like Loverboy’s Lover Kimmy-Poo, there’s no problem. Of course, if there was a problem with notice, they can just send notice now. Problem solved. Mikey got his manties all worked up over nothing. Boy-oh-boy was Mikey excited to run with this story! Go Team Pirates!

Gwiz (profile) says:

*Mission Accomplished*

I do not believe “justice” was ever the point of the MegaUpload raid, it was terror.

I agree.

After reading Dotcom’s response and this article I am beginning to wonder if the US Government might have accidentally created their very own “SOPA moment” concerning asset forfeiture laws.

Widespread public awareness is a powerful thing.

RonKaminsky says:

Look at the DMCA

The DMCA proved that it’s possible to write a law which makes it illegal to help someone else to do something legal, so I see no reason why one couldn’t have a(n equally stupid) law which makes it illegal for people to “conspire” together to run a company which provides service X, even if this service is totally legal.

Kenneth Michaels (profile) says:


I believe the government may argue that the seven individuals (the conspiracy) actually owned and ran everything and that the corporation was just a shell to hide and facilitate their criminal conspiracy. Thus, you can just ignore the corporation, it didn’t count anyway.

Notice the information that has “leaked” in the past few days. Megaupload was planning an IPO. Megaupload employed 220 people. Megaupload had multiple divisions, including a clothing division. These facts support the argument that Megauplaod was an actual bone fide corporation and not just the shell of a conspiracy. These facts were probably already briefed and submitted to the court.

Rekrul says:

Will they keep the servers?

If they can’t proceed with the prosecution, will they keep the servers and domain names until they re-file?

More likely that they will just permanently keep everything they seized, including MU’s money.

Would that be legal?

Unfortunately, it probably would be. Asset seizure and forfeiture in the US has a very low standard and it’s basically guilty until proven innocent. That’s for the seized property, not the people involved. You have to go to court and convince a judge that whatever was seized is absolutely, positively, 100% legal. From the stories on the net, that happens about 10% of the time…

Keeping seized property is so common that police departments count on it as part of their budget.

hmm (profile) says:


Kim must be chortling somewhere.

Rapidshare and a host of other lockers went “user only” and removed sharing from their systems, so now the competition to Megaupload has been pretty much killed stone dead…

Now he just needs to get the data back, run an IPO and make 10’s of billions pure profit.

(I believe the estimates for the value of publicity for all this runs into hundreds of millions of dollars of free advertising for Megaupload).

Anonymous Coward says:

*Mission Accomplished*

Perhaps this is Dajaz1 all over again?

Doing just enough to keep the site down for long enough that money doesn’t come in until finally sometime far into the future when the lack of real facts or laws supporting the charges are finally admitted, and they’ve stalled for as long as they could (just like Dajaz1) so that it doesn’t matter if the defendant was innocent to begin with, now they are buried in debt and bad press, that their chances of recovery are slim to none. Too bad there isn’t repercussions for the DoJ doing their jobs unfaithfully.

Anonymous Coward says:


At some point the sheer epic incompetency of the individuals bringing this extremely expensive case forward will piss off the judge harder than the judges who were unfortunate enough to deal with John Steele, Terik Hashmi and Brett Gibbs.

Sure, go ahead and do it all again, because it makes you look all that much better.

G Thompson (profile) says:

*Mission Accomplished*

Thanks for the NZ link, never realised MegaUpload was considering going public either, that could be an interesting
situation if the process was actually in motion.

Ah he was considering the US market with an IPO, this whole situation starts making more sense now. I wonder if the “Big Four? auditors and several of the world?s largest investments banks” he was talking too talked to some of their friends in either Hollywood or the US Capital. Only speculation mind you, though we are talking about Banks and auditors that the USG just gave billions of dollars too. Conflicts anyone???

Next time Kim, go to the other markets.. Australia could be good. we even have Brothels (the NYSE & USG hates that).

And in regards to if the trial is never going to happen and they are acquitted. If I was one of the lawyers I would go for ‘with prejudice” to recoup all losses, or if not then counter with malicious prosecution charges. Especially within NZ.

Chargone (profile) says:


I’m just hoping this is FINALLY the nail in the coffin that puts an end to the National party (the current NZ government)

they were pretty much going to lose the last election but somehow Earthquake = incumbents have advantage despite not doing a damn thing beyond stripping the inhabitants of the affected area of a number of rights and democratic processes for the duration (non-specified). add in incredibly corrupt reporting and/or opinion polls and they SHOULD have been out on their ears last election.

I’d like to think that such a blatant waste of resources and corrupt action against private citizens in the name of foreign interests would do them in. i’m probably dreaming though.

(I’d LOVE a Green/NZ First/Conservative coalition. never going to happen, but when you get the pro-freedoms, pro-citizens and ‘change only stuff that would actually HELP’ parties all lined up, and they happen to be (in spite of the name of the last one) the ones with the most radical economic policies (necessary at this point) that aren’t suicidal AND they’ve all picked up a middling-strong nationalist vibe (as opposed to Labour’s globalist or National’s Pro-USA and China angles, not racists/anti-regionalist/anti-imigration nationalism) … let’s just say that it’d be as close to perfect as we could get here without a monarch actually willing to do their damn job and , figeratively speaking, sit on the idiots who keep selling out the country and it’s citizens in favour of stupid ideology or pure greed and keep the whole lot in line…)

G Thompson (profile) says:


Actually the Roadshow v iiNet case just decided is going to be a HUGE thorn in the USG’s case against extraditing Kim or any of the other people currently residing in Commonwealth countries (ie: New Zealand)

The NZ High Court has already weighed in on this issue with Dotcom already, believe me this is not a fait accompli for the US prosecutors.. Far from it

G Thompson (profile) says:


You really don’t understand the concept of reading do you.

They cannot EVER serve them since Foreign corporations cannot be served with criminal charges outside the USofA under US law.

The only way MegaUpload could be charged is if the NZ government charged them criminally. Which if they would (that’s something the USA cannot control) would then be fully tried and processed within the NZ Criminal Court system (where the US Prosecutors cannot even do anything other than sit in the gallery like the plebs they would be)

If the US tried to change it’s laws to enable it to charge Foreign Corporations, every other country would then change its laws to charge US companies.

See this is how the rest of teh world that is actually democratic and fair works, not just in the interests of the USofA. Don’t like it? well suck it up you better get used to it.

The eejit (profile) says:


The point is that the assets belong to the corporation. Thus, if they cannot be served in your nation, then why should your laws apply? If they do, what is to stop Iran from seizing all the assets of Microsoft? After all, they could be sdoiong something illegal to Iran. I’d be very interestede to see an extradition of Steve Ballmer to Iran for trial.

*”your” referring to the US

Kenneth Michaels (profile) says:


Also, the Megaupload corporation probably had to be named in the US criminal indictment so that its assets could be seized in NZ by the NZ authorities. But because the corporation will not be served, the charges must eventually be dismissed against the corporation and the corporation will no longer be part of the case (even though the individuals will still be part of the case). Then NZ will have to return the assets of the corporation to the corporation. Also, the NZ officials will look pretty stupid as they will have been tricked by the US government into seizing the assets of a corporation based on a criminal indictment that the US knew could not stand.

Also, I think I’m wrong when I said above that “these facts were probably already briefed and submitted to the court.”

Anonymous Coward says:


Apparently don’t get it either – they aren’t serving ONLY the corporation, but the individuals – and they have all had it handed to them (repeatedly, I am sure).

The company, well… it’s only part of the conspiracy. Plus I doubt there was a true arms length relationship between kim and his companies (he has been nailed on that before), so in the end, where does Kim stop and the company start? (Hint, it’s all Kim).

Demoncratic and fair doesn’t mean “you can get away with anything”. Sorry to burst your bubble of innocence.

Kenneth Michaels (profile) says:

Criminal Conspiracy - maybe not.

I just read that: “an individual cannot conspire with the corporation for which he works or with another officer, employee or agent of his corporate employer.” Page 68 of “Jury Instructions in Criminal Antitrust Cases 1976-1980.” I don’t know if this is still the law, or ever was for a case like Megaupload. But, the US is relying on the “conspiracy” charge to get the 5 years for extradition, so if it is the law, the US would seem to have an uphill battle.

The US will argue that the Megaupload corporation was a shell to further the conspiracy, not a real corporate entity. Megaupload with argue otherwise, which may explain why we are seeing facts about their corporate existence (number of employees, IPO planned, etc.).

Anonymous Coward says:


If you want to champion your side as the side of truth and justice, shouldn’t doing things right and by the book be your standard operating procedure? I’m amazed at the amount of leeway you’re willing to give to the mistakes that have happened in this case while advocating the harsh enforcement of copyright on everyone else.

That Anonymous Coward (profile) says:

Will they keep the servers?

A question I have is many of the seizures were done in NZ and other countries, were the items transferred to the US or not?

If they US do not have their dirty hands on it, it most likely would be returned by people just acting on the bad information provided.

Dotcom owns several things he could use to finance but “purchase” of the Carpathia servers to get them up long enough to have them moved well outside of the borders of the US.

Mega was a multimillion corporation, they started small and I have no doubt that when this ill conceived case finally blows over they will be back with a vengeance.

That Anonymous Coward (profile) says:


Part of the problem for the Government is going to be trying to prove they can tell their head from their ass at this point. While you have various **AA’s releasing press releases claiming all cyberlockers are only profiting because of their material and they are going to shut them all down just like Mega, it calls into question why the DoJ is the enforcer for a lobbyist group.

The Hotfile case is going to put a gaping wound into WB. They committed copyfraud and keep doubling down claiming Hotfile didn’t do enough under the law, when it is clear they went well above and beyond to appease them… and it still wasn’t enough and WB abused those powers.

The cyberlockers based in the US are going to die off. Others will be moving their servers well outside of the US, and looking at rebranding themselves as something other than .com .net or any other TLD the US claims to have special rights to allow them to go after.

Mega needs to come back and launch the music platform, that will cause sheer panic. The success of that is where their future lies.

ravnos says:

*Mission Accomplished*

You have no idea what you’re talking about. What you’re saying is of the broad sense of what megaupload DID in the past years. Companies such as Warner Bros. have control content access on Megaupload which the Hollywood company itself can remove files which they believe can be infringing uploaded by USERS. The company owners don’t even do uploads there aside from their file upload testing before the production of the site.

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