BitTorrent Admin Jailed For Tax Evasion On Site Donations

A man from Sweden has been handed a jail sentence for offenses he committed while running a BitTorrent site. The former administrator of the PowerBits private tracker was found guilty of copyright infringement and tax and accounting fraud after he failed to register donations provided by the site's users as income with the tax authorities. He will serve one year in prison.

According to the charge sheet from December 2011, the defendant in the case had been responsible from the operations and administration of a BitTorrent site between early 2007 and 2009.

The site, the now-defunct private BitTorrent tracker PowerBits.org, is described as a site which allowed users to upload torrent links with the intention of making copyright material available to the public. Among those who provided evidence in the case were Antipiratbyran and IFPI. The sample set of infringements included nine music albums and ten films.

PowerBits was further described as “a commercial file-sharing service” in the sense that the admin “regularly received and assimilated payments from the users.” These payments appear to be what most private torrent sites call “donations” although it’s clear that the authorities did not consider them gifts.

When TorrentFreak spoke with Henrik Pontén of Antipiratbyran about the case he framed the site’s operations as a business, an opinion apparently shared by the Swedish tax authorities. They considered PowerBits to be an Internet business that generated “significant revenues” and on this basis went on to accuse the administrator of failing to fulfill his accounting obligations and avoiding tens of thousands of dollars in taxes.

The Varberg district court heard yesterday that through PowerBits the now 34-year-old former admin had helped to make at least 2,000 copyright protected works available to the public without rightsholder permission.

Although the Court found that the defendant had not directly made available any of the works himself, he was found guilty of assisting in the copyright infringements of the site’s users.

The man was also found guilty of accounting and tax offenses, having allegedly generated nearly $207,000 from PowerBits without declaring the income. A request to confiscate almost $54,000 was denied.

He was sentenced to one year in prison and banned from running a business for three years.

“In addition to PowerBits, there are a number of similar Swedish illegal services with identical business ideas,” Henrik Pontén of Antipiratbyran told TorrentFreak. “The services often have a technical argument when they explain why their business model is legal. So far this has not been successful and those responsible for The Pirate Bay and PowerBits have been sentenced to lengthy prison terms.”

Swedish sites that refuse to close down are being reported to the police, Pontén adds.

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