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Officials seize $42 million in MegaUpload assets

Raids on offices, homes, and hotel suites in Hong Kong yield a large amount of digital evidence and suspected criminal proceeds.

Scene from a New Zealand courtroom: Kim DotCom (at right) and others arrested January 19.
Scene from a New Zealand courtroom: Kim DotCom (at right) and others arrested January 19.
CNET, by Jonathan Skillings

In a further setback for MegaUpload, Hong Kong Customs officials have frozen $42 million in assets held by the beleaguered file-swapping site during raids on offices, homes, and hotel suites.

The raids, which involved 100 officers, yielded a large amount of digital evidence and $42 million in suspected criminal proceeds, the Customs agency said in a statement. High-speed servers believed to be connected to the cases were found in expensive hotel rooms.

"The assets have been frozen in accordance with related ordinances. The operation is ongoing," the agency said in a statement.

The U.S. Justice Department and FBI shut down the popular Internet locker service on Thursday and announced indictments against seven people on charges related to online piracy, including racketeering conspiracy, conspiring to commit copyright infringement, and conspiring to commit money laundering.

Four of the seven suspects were taken into custody, including Kim DotCom, aka Kim Schmitz, who was arrested in New Zealand. DotCom is being held without bail until at least tomorrow when a hearing is scheduled to address extraditing DotCom to the United States to face charges.

Federal officials accuse DotCom and his fellow defendants of pocketing millions of dollars in illegal profits and costing the film industry more than $600 million in damages. The defendants face up to 20 years in prison if convicted.

The shutdown and arrests led the hacker group Anonymous to launch denial-of-service attacks on a number of music and film industry sites as well as the Web site of the Justice Department.

DotCom, a former illegal street racer, hacker, and convicted felon, reportedly lived in a $30 million mansion in New Zealand. Police reportedly seized 18 vehicles, including a vintage pink Cadillac, a Lamborghini, a 2010 Maserati, and 2008 Rolls Royce Phantom with a personalized license plate that reads "God."