The whole New Zealand-based spying operation against Kim Dotcom and his Megaupload co-defendants was illegal, the High Court has ruled. The revelation appears in a newly released decision, which shows the GCSB spy agency refusing to respond to questions about its activities on the basis that could jeopardize national security.
As part of its criminal case against Megaupload, the U.S. Government seized several domain names belonging to Kim Dotcom’s file-hosting service. Nearly five years later the authorities still control the domains but they haven’t done a very good job of securing them. Megaupload.org now links to a soft porn portal.
As Kim Dotcom’s extradition defense enters its second day, the court has heard that none of the 13 charges against the Megaupload founder are enough to extradite him to the United States. The U.S. is characterizing the alleged offenses as extraditable fraud but Dotcom’s team believes that copyright violations can not be prosecuted as such.
The U.S. Government has informed the Court of Appeals that the civil forfeiture case against Megaupload and Kim Dotcom was launched as a last resort. The authorities feared that Dotcom and his colleagues would regain possession of the millions in seized assets and argue that they are properly labeled as “fugitives.”
A recording of Kim Dotcom and several Universal Music executives captured two days before the Megaupload raids has revealed the label planning to do a deal with the entrepreneur. Amid discussion of ‘taxing’ Google by diverting its ad revenue to the label, the execs offered to downgrade Dotcom from “evil” to “neutral” in return for dropping legal action over the “Mega Song”.
Well over three years have passed since Megaupload was shutdown, but there is still little progress in the criminal proceedings against the operation.
The United States hopes that New Zealand will extradite Kim Dotcom and his colleagues, but the hearings have been delayed several times already.
Meanwhile, several domain names including the popular Megaupload.com and Megavideo.com remain under the control of the U.S. Government. At least, that should be the case. In reality, however, they’re now being exploited by ‘cyber criminals.’
Instead of a banner announcing that the domains names have been seized as part of a criminal investigation they now direct people to a Zero-Click adverting feed. This feed often links to malware installers and other malicious ads.
One of the many malicious “ads” the Megaupload and Megavideo domain names are serving links to a fake BBC article, suggesting people can get an iPhone 6 for only £1.
And here is another example of a malicious ad prompting visitors to update their browser.
The question that immediately comes to mind is this: How can it be that the Department of Justice is allowing the domains to be used for such nefarious purposes?
Looking at the Whois records everything seems to be in order. The domain name still lists Megaupload Limited as registrant, which is as it was before. Nothing out of the ordinary.
The nameserver PLEASEDROPTHISHOST15525.CIRFU.BIZ, on the other hand, triggers several alarm bells.
CIRFU refers to the FBI’s Cyber Initiative and Resource Fusion Unit, a specialized tech team tasked with handling online crime and scams. The unit used the CIRFU.NET domain name as nameserver for various seized domains, including the Mega ones.
Interestingly, the CIRFU.NET domain now lists “Syndk8 Media Limited” as registrant, which doesn’t appear to have any connections with the FBI. Similarly, CIRFU.BIZ is not an official CIRFU domain either and points to a server in the Netherlands hosted by LeaseWeb.
It appears that the domain which the Department of Justice (DoJ) used as nameserver is no longer in control of the Government. Perhaps it expired, or was taken over via other means.
The dramatic events of January 2012 in which the gigantic Mega empire of Kim Dotcom was brought to its knees are now more than three years old. Legal argument has dogged the case from day one, with each passing month presenting yet more points of contention.
One of the oldest issues surrounds the hardware seized as part of the global operation to close down what was once the world’s largest centralized file-sharing operation.
The U.S. Government seized 1,103 servers at Carpathia’s hosting facility in the United States, equipment that is currently gathering dust in a Virginia storage facility. Also at issue is a lesser-discussed batch of servers seized in Canada.
On January 18, 2012, a judge in Ontario issued a warrant to seize the 32 servers located in an Equinix datacenter. As the case continued to build against Megaupload, Kim Dotcom and his associates, the U.S. government asked Canadian authorities to hand the hardware over, claiming that an internal Megaupload email revealed them to be “database / number crunching machines.”
A year later in January 2013, Megaupload protested the handing over of the hardware to U.S. authorities claiming that the servers contained a lot of information irrelevant to the case. Megaupload said an independent forensic examiner could examine the servers and determine their contents before any handover.
An Ontario court sided with Megaupload and refused to send the servers’ data to the United States. Instead, both sides were ordered to find a way to filter out irrelevant content.
Now, more than two years later, the issue of just how much of this seized content can be sent to the United States remains an issue. The matter reappeared before a Toronto court Monday, with fresh ideas on how progression can be made.
Crown attorney Moiz Rahman, acting on behalf of the U.S. government, suggested the appointment of an independent group of forensic examiners to inspect the data and determine which data is relevant to the case, CBC reports.
However, Megaupload lawyer Scott Hutchison raised concerns that once back in the United States, the so-called “clean team” might disclose non-relevant information they’d discovered on the servers. Any ruling in Canada to seal their lips would not be enforceable in the U.S., Hutchinson said.
“Once they return to the United States, that’s nothing more than a promise,” the lawyer said.
While conceding that the “vast majority” of the data was likely to be media uploaded by Megaupload’s users, Hutchinson suggested that it would be preferable to hire an independent Canada-based investigator to carry out the work.
But speaking for the Crown on behalf of the U.S., Rahman said that a U.S. team could present the results of its investigation to a Canadian court, which could then decide what information would be allowed back to the United States under current treaty protocol.
“That’s a little bit of cold comfort to me,” said Justice Michael Quigley.
After Rahman claimed that an independent Canadian investigator would prove too expensive, the Judge ordered the parties to present their respective costings to the court before any decision on the fate of the data is made.
This also ensures that Dotcom won’t have money to defend himself…
Following the 2012 raid on Megaupload and Kim Dotcom, U.S. and New Zealand authorities seized millions of dollars in cash and other property.
Claiming the assets were obtained through copyright and money laundering crimes, last July the U.S. government launched a separate civil action in which it asked the court to forfeit the bank accounts, cars and other seized possessions of the Megaupload defendants.
Megaupload’s defense heavily protested the request but was found to have no standing, as Dotcom and his colleagues can be seen as fugitives.
A few hours ago District Court Judge Liam O’Grady ordered a default judgment in favor of the U.S. Government. This means that the contested assets, which are worth an estimated $67 million, now belong to the United States.
“It all belongs to the U.S. government now. No trial. No due process,” Dotcom informs TF.
More than a dozen Hong Kong and New Zealand bank accounts have now been forfeited including some of the property purchased through them. The accounts all processed money that was obtained through Megaupload’s alleged illegal activities.
Following a series of High Court orders six UK ISPs are required to block subscriber access to many of the largest pirate sites.
The efforts started in 2012 and the list continued to grow in the years that followed.
In a new wave the BPI, which represents the major record labels, has teamed up with music licensing outfit Phonographic Performance Limited to obtain an order targeting a series of MP3 download sites.
This latest round expands the UK blocklist by 17 MP3 download sites, including stafaband.info, rnbxclusive.se, plixid.com and mp3.li. It brings the total number of blocked sites over a hundred, 110 to be precise.
Nearly all of the newly blocked sites are so-called MP3 search engines. However, the list also includes megasearch.co, a website that allows users to find files on the Mega cloud storage service founded by Kim Dotcom.
September last year the Digital Citizens Alliance and NetNames released a report that looked into the business models of “shadowy” file-storage sites.
Titled “Behind The Cyberlocker Door: A Report How Shadowy Cyberlockers Use Credit Card Companies to Make Millions,” the report offers insight into the money streams that end up at these alleged pirate sites.
The research claims that the sites in question are mostly used for copyright infringement. But while there are indeed many shadowy hosting services, many were surprised to see the Kim Dotcom-founded Mega.co.nz on there.
For entertainment industry groups the report offered an opportunity to put pressure on Visa and MasterCard. In doing so they received support from U.S. Senator Patrick Leahy, who was also the lead sponsor of the defunct controversial Protect IP Act (PIPA).
Senator Leahy wrote a letter to the credit card companies claiming that the sites mentioned in the report have “no legitimate purpose or activity,” hoping they would cut their connections to the mentioned sites.
Visa and MasterCard took these concerns to heart and pressed PayPal to cut off its services to Mega, which eventually happened late last month. Interestingly, PayPal cited Mega’s end-to-end-encryption as one of the key problems, as that would make it harder to see what files users store.
The PayPal ban has been a huge blow for Mega, both reputation-wise and financially. And the realization that the controversial NetNames report is one of the main facilitators of the problems is all the more frustrating.
TorrentFreak spoke with CEO Graham Gaylard, who previously characterized the report as “grossly untrue and highly defamatory,” to discuss whether Mega still intends to take steps against the UK-based NetNames for their accusations.
Initially, taking legal action against NetNames for defamation was difficult, as UK law requires the complaining party to show economic damage. However, after the PayPal ban this shouldn’t be hard to do.
Gaylard is traveling through Europe at the moment and he notes that possible repercussions against the damaging report are high on the agenda.
“Yes, I am here to see Mega’s London-based legal counsel to discuss the next steps in progressing the NetNames’ response,” Gaylard informs TF.
Mega’s CEO couldn’t release any details on a possible defamation lawsuit, but he stressed that his company will fiercely defend itself against smear campaigns.
“Mega has been operating, and continues to operate a completely legitimate and transparent business. Unfortunately now, with the blatant, obvious, political pressure and industry lobbying against Mega, Mega needs to defend itself and will now cease taking a passive stance,” Gaylard says.
According to the CEO Mega is running a perfectly legal business. The allegation that it’s a piracy haven is completely fabricated. Like any other storage provider, there is copyrighted content on Mega’s servers, but that’s a tiny fraction of the total stored.
To illustrate this, Gaylard mentions that they only receive a few hundred takedown notices per month. In addition, he notes more than 99.7% of the 18 million files that are uploaded per day are smaller than 20MB in size, not enough to share a movie or TV-show.
These statistics are certainly not the hallmark of a service with “no legitimate purpose or activity,” as was claimed.
While the PayPal ban is a major setback, Mega is still doing well in terms of growth. They have 15 million registered customers across 200 countries, and hundreds of thousands of new users join every month.