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Feds: MegaUpload was not entrapped

The U.S. government fires back at the file-sharing service's claims that it was deceived by the feds.

Dara Kerr Former senior reporter
Dara Kerr was a senior reporter for CNET covering the on-demand economy and tech culture. She grew up in Colorado, went to school in New York City and can never remember how to pronounce gif.
Dara Kerr
2 min read
Kim DotCom (at right) and his company managers shortly after being arrested in January 2012 for alleged copyright violations and fraud. Screenshot by CNET

Entrapment is one of MegaUpload's claims in its legal battle against the U.S. government. The feds are now saying this claim is "baseless."

"Megaupload's allegations are baseless, as even a cursory review of Megaupload's pleading and the search warrant materials at issue disproves the allegation that the government misled the court as part of a conspiracy to entrap Megaupload," the government wrote in a Friday filing (PDF).

MegaUpload, which was founded by Kim DotCom, is the highest-profile service to be accused of criminal copyright violations by the U.S. government -- and the case is being watched closely around the globe.

DotCom's saga has played out over the past year after he was arrested on allegations of criminal copyright violation, conspiracy, money laundering, and wire fraud. U.S. federal officials accused DotCom of pocketing millions of dollars in illegal profits from criminal file sharing and downloading that has reportedly cost the film industry more than $600 million in damages.

One of the reasons DotCom claims he was entrapped by the U.S. government is because he complied with a federal search warrant targeting five file-sharing services using MegaUpload's infrastructure in 2010, according to Wired. These file-sharing services, including Movies-Links.tv, Planetmoviez.com, and Ninjavideo.net, were accused of being movie-pirating sites.

MegaUpload reportedly gave the authorities a database of 39 pirated movies, which allowed the feds to raid the sites' operators and seize their assets. Even though DotCom cooperated with the government, the feds then used this same database as evidence in its case against MegaUpload. Apparently, DotCom never deleted the allegedly pirated movies from MegaUpload's servers, which the government said proved he was aware of pirated material on the platform.

In a January 2 court filing (PDF), DotCom's lawyer Ira Rothken wrote that "MegaUpload had every reason to retain those files in good faith because the government had sought and obtained MegaUpload's cooperation in retrieving those files and warned that alerting users to the existence of the warrant and the government's interest in the files could compromise the investigation."

However, the feds filing from Friday said this claim is meritless and that the government never told DotCom to keep the files. The feds also said that more than 2,000 users uploaded the 39 pirated movies because the material wasn't deleted from MegaUpload's servers.

Currently, DotCom and his company managers are free on bail in New Zealand while waiting for an extradition hearing. The hearing will determine whether they will be extradited to the U.S. to stand trial. The earliest the hearing will be scheduled is July 2013.