When the U.S. Government applied for the search warrants against Megaupload last year, it told the court that they had warned Megaupload in 2010 that it was hosting infringing files.
Through its hosting company, Megaupload was informed about a criminal search warrant in an unrelated case where the Government requested information on 39 infringing files stored by the file-hosting service.
At the time Megaupload cooperated with this request and handed over details on the uploaders. The files were kept online as Megaupload was instructed not to touch any of the evidence. However, a year later this inaction is being used by the U.S. Government to claim that Megaupload was negligent, leaving out much of the context.
“As of November 18, 2011, thirty-six of the thirty-nine infringing copies of copyrighted motion pictures were still being stored on servers controlled by the Mega Conspiracy,” the Government claimed in the Megaupload search warrants.
This course of action is misleading according to Megaupload’s legal team.
“Megaupload had every reason to retain those files in good faith because the Government had sought and obtained Megaupload’s cooperation in retrieving the files and warned that alerting users to the existence of the warrant and the Government’s interest in the files could compromise the investigation,” Megaupload attorney Ira Rothken explains.
In a new filing submitted to the District Court, Megaupload informs the court about the Government’s failure to disclose the full picture.
“Nowhere did the Government tell this Court that Megaupload had done exactly what the Government had asked it to do — execute a search warrant without alerting the ostensible targets to the existence of an investigation,” Megaupload’s lawyers write.
“The Government’s contention to this Court that Megaupload’s preservation of the status quo was evidence of criminal intent is false, and deliberately so,” they add.
By failing to mention that the files were not removed because the authorities specifically requested this, the Government deliberately misled the Court, Megaupload says. The lawyers argue that this is not only troubling by itself, but also fits into a wider picture of misconduct that was revealed in New Zealand court proceedings.
“It is clear from the unsealed warrants that the Government withheld critical information from its supporting affidavits. That withholding calls into grave question the legality of any and all seizures effected pursuant to those warrants. The withholding is all the more worrisome considering the identified pattern of governmental misconduct plaguing the proceedings in New Zealand,” they write.
Megaupload therefore asks for these issues to be addressed in an upcoming hearing.
“At this point, it is only appropriate that questions be asked and answered about why the Government withheld information from the Court as it did and as to whether it could have otherwise claimed proof of Megaupload’s criminal mens rea had it not planted Megaupload’s alleged knowledge of infringing files under false auspices..,” the filing reads.
If the Megaupload search warrants are indeed declared invalid or unlawful the court may order the return of Megaupload’s assets. This would not only enable former users to get their files back, but would also return millions of dollars in assets to Megaupload.
Kim Dotcom told TorrentFreak that he is furious about the U.S. Government’s actions, which ruined his business.
“A legitimate business destroyed. 220 jobs destroyed. All assets frozen without a hearing. Millions of users without access to their legitimate files. Anti-terror forces to arrest non-violent nerds. Spy agencies to surveil our communications illegally. The White House, a Prime Minister, two governments abusing our rights.”
“Read this filing to see the unlawful methods used to destroy us,” Dotcom adds.
Megaupload’s most recent filing could turn out to be a crucial move in the ongoing criminal proceedings. If the warrants are declared unlawful, as happened earlier in New Zealand, then Kim Dotcom and his fellow defendants will be in a much better position to win the case.