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Megaupload Defendants Face More Criminal Counts, U.S. Says

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Feb. 17 (Bloomberg) -- Megaupload.com, a file-sharing website charged with illegally distributing copyrighted movies and music, faces more counts of criminal copyright infringement and wire fraud.

A revised indictment filed in a U.S. court in Alexandria, Virginia, yesterday charged Megaupload.com and founder Kim Dotcom with three new criminal copyright counts and five new wire fraud counts for allegedly running an illegal enterprise for five years that unlawfully copied works and made them available for download to customers. The original Jan. 5 indictment included five counts.

Since September 2005, what prosecutors have dubbed the “Mega Conspiracy” has generated more than $175 million in criminal proceeds by distributing millions of copies of copyrighted works, such as movies, television programs, music, books, video games and software, according to the indictment.

Megaupload reproduced copyrighted works directly from other websites including Google Inc.’s YouTube for illegal sharing and to give the false impression that a related video-sharing website hosted user-generated, rather than copyrighted, content, prosecutors said in an e-mailed statement today.

The conspiracy was led by Dotcom, a resident of Hong Kong and New Zealand and a dual citizen of Finland and Germany, who founded Megaupload Ltd., according to the indictment.

New Zealand Bail

Dotcom, imprisoned in New Zealand since Jan. 20 at the request of the U.S., failed to win release yesterday after a judge declined to immediately rule on his bid for bail.

North Shore District Court Judge N. R. Dawson said he would deliver his decision before Feb. 22, according to an e-mailed statement from the court. North Shore District Judge David McNaughton on Jan. 25 denied Dotcom’s request for bail, saying the risk of him fleeing New Zealand to a jurisdiction such as his home country of Germany, which has no extradition treaty with the U.S., was too great.

The case is U.S. v Megaupload.com, 12-0003, U.S. District Court, Eastern District of Virginia (Alexandria).

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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