US Cracks Down On Download Sites In Midst Of Anti-Piracy Debate

In the midst of the global flare-up over draft anti-piracy legislation in the US Congress this week, several heavy-hitting actions were taken in the United States against websites said to be supporting unauthorised content.

Today, the Department of Justice and U.S. Immigration and Customs Enforcement (ICE) announced that Matthew David Howard Smith, 24, of Raleigh, North Carolina, was sentenced today in Alexandria, Virginia, to 14 months in prison “for his role in founding NinjaVideo.net, a website that provided millions of users with the ability to illegally download high-quality copies of copyright-protected movies and television programs.”

At sentencing, US District Judge Anthony J. Trenga also ordered Smith to serve two years of supervised release following his prison term, to pay $172,387 and to forfeit to the US five financial accounts and various computer equipment involved in the crimes, the Justice Department said. Smith pleaded guilty on 23 September 2011 to conspiracy and criminal copyright infringement.

On 9 September Smith was indicted along with four of the other top administrators of NinjaVideo.net. Co-defendant Hana Amal Beshara was sentenced on 6 January to 22 months in prison and ordered to repay nearly $210,000. Two other defendants await sentencing.

The Justice Department also made a high-profile announcement yesterday that in one of the largest copyright cases ever it is charging seven people and two corporations with “running an international organized criminal enterprise allegedly responsible for massive worldwide online piracy of numerous types of copyrighted works, through Megaupload.com and other related sites.”

The websites generated more than $175 million in criminal proceeds and caused more than $500 million in harm to copyright owners, the Justice Department and FBI announced. The action “directly targets the misuse of a public content storage and distribution site to commit and facilitate intellectual property crime,” Justice said.

According to Justice, Megaupload.com is advertised as having more than one billion visits to the site, more than 150 million registered users, 50 million daily visitors, and accounting for four percent of the total traffic on the internet.

“The individuals and two corporations – Megaupload Limited and Vestor Limited – were indicted by a grand jury in the Eastern District of Virginia on Jan. 5, 2012, and charged with engaging in a racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering and two substantive counts of criminal copyright infringement,” Justice said. “The individuals each face a maximum penalty of 20 years in prison on the charge of conspiracy to commit racketeering, five years in prison on the charge of conspiracy to commit copyright infringement, 20 years in prison on the charge of conspiracy to commit money laundering and five years in prison on each of the substantive charges of criminal copyright infringement.”

The indictment alleges that the criminal enterprise is led by Kim Dotcom, aka Kim Schmitz and Kim Tim Jim Vestor, 37, a resident of both Hong Kong and New Zealand.

The move against Megaupload was bold for the Obama administration as the website had many supporters among top performers and musicians, in addition to its large user base. The action was praised by the Recording Industry Association of America and the Motion Picture Association of America. RIAA said it was “deeply grateful.”

But the action triggered takedowns of the Justice Department, MPAA and RIAA websites by Anonymous in response, according to reports.

On 18 January, millions of people participated in a massive online protest against anti-piracy legislation in the US Congress, leading to postponements of action on the bills in both House and Senate (IPW, US Policy, 20 January 2012).