Megaupload Assisted FBI vs NinjaVideo, But Evidence Then Used Against Them

In 2010, individuals from the now-defunct NinjaVideo site stored copyright-infringing videos on the servers of Megaupload. These subsequently came to the attention of the FBI who were conducting an investigation into NinjaVideo and its operators. As a result Megaupload was served with a criminal search warrant requiring it to hand over information to the authorities, but in a cruel twist Megaupload's cooperation and a desire not to destroy evidence is now being used as evidence against it.

The February 2012 “Superseding Indictment” document, which lays out the Grand Jury charges against Megaupload, runs to 90-pages long and contains dozens of allegations of illegal behavior against the operators of the now-shuttered file-hosting site.

As outlined in our discussions this week, Dotcom says that some of the allegations are misleading, particularly one claiming that Megaupload failed to delete infringing video files from its servers.

“A member of the Mega Conspiracy informed several of his co-conspirators [in 2010] that he located the named files using internal searches of the Mega Conspiracy’s systems,” the DoJ wrote.

“As of November, 18 2011, thirty-six or the thirty-nine infringing copies of the copyrighted motion pictures were still being stored on servers controlled by the Mega Conspiracy.”

Out of context the claim, that Megaupload ignores the DMCA, looks bad. However, when the full picture is put forward – that Megaupload found these files because a criminal search warrant from the FBI required them to do so – things start to look quite different.

And the plot thickens. Wired has discovered that the infringing files were put on Megaupload’s servers by individuals connected to the now-defunct streaming video site NinjaVideo.

The FBI were conducting a criminal investigation into NinjaVideo (which later resulted in several of its operators going to jail) and required Megaupload’s cooperation after serving the company with a search warrant in June 2010, just days before NinjaVideo was raided.

“Megaupload complied with the warrant and cooperated with the government’s request,” Megaupload lawyer Ira Rothken confirms.

According to Kim Dotcom, the FBI made it clear that the warrant should be kept quiet so as not to jeopardize the NinjaVideo inquiry.

“The agent was concerned that the target could be warned and that this needs to be handled confidentially,” Dotcom informs TorrentFreak.

The Megaupload founder says that this warning was taken seriously and that since the files were clearly evidence in the case none of them were interfered with.

“Obviously when the FBI contacted us they made this clear to us and therefore we did not touch the accounts or the files,” he says.

“We even emailed back to Carpathia [Megaupload’s US server host] to ask the FBI (and the FBI had our emails before asking for the Mega domain seizure) if we should do anything about those files. We never got a response.”

But the criminal investigation against NinjaVideo and evidential issues in that respect were pushed aside when it came to building a case against Megaupload and seizing its domain.

“To use this against us and to tell a Judge that the Megaupload domain seizure is justified because we have not removed those 39 files is totally unethical and misleading,” Dotcom concludes.

The fact that the infringing files remained on Mega’s leased servers led the U.S. government to claim that Megaupload infringed copyright, despite the company having been served the original NinjaVideo search warrant as the site’s service provider, one that presumably should have received safe-harbor protection under the DMCA.

As previously reported, NinjaVideo founder Hana Beshara was eventually sentenced to 22 months in jail and ordered to repay almost $210,000.

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