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Federal prosecuters have shut down popular file-sharing site and charged its founders with a number of felonies, according to a statement by the Department of Justice and the FBI.

The DOJ indictment alleges that a vast criminal enterprise led by Kim Dotcom has caused more than $500 million in harm to copyright owners, while generating more than $175 million in criminal proceeds. Dotcom founded Megaupload Limited, and has vigoursly defended Megaupload as a legitimate website and said previously that the site took down piracy violators in accordance with DMCA rules.

Megaupload was at one time the 13th most popular website on the Internet. Similar sites to Megaupload like MediaFire, YouSendIt and Rapidshare provide file-sharing services, so we wonder if the government intends to target them as well.

The government has also charged the following individuals in the indictment:

• Finn Batato, 38, a citizen and resident of Germany, who is the chief marketing officer;
• Julius Bencko, 35, a citizen and resident of Slovakia, who is the graphic designer;
• Sven Echternach, 39, a citizen and resident of Germany, who is the head of business development;
• Mathias Ortmann, 40, a citizen of Germany and resident of both Germany and Hong Kong, who is the chief technical officer, co-founder and director;
• Andrus Nomm, 32, a citizen of Estonia and resident of both Turkey and Estonia, who is a software programmer and head of the development software division;
• Bram van der Kolk, aka Bramos, 29, a Dutch citizen and resident of both the Netherlands and New Zealand, who oversees programming and the underlying network structure for the Mega conspiracy websites.

Dotcom, Batato, Ortmann and van der Kolk were arrested today in Auckland, New Zealand.

Also coming out today is the surprising fact that musician and producer (and Alicia Keys’ husband) Swiss Beatz is actually the CEO of Megaupload. The New York Post “outed” Beatz yesterday, and said Beatz got his musician friends in hot water for making a music video promoting the service. Beatz was not named in the federal indictment.

Personally, I blame Megaupload for bringing scrutiny upon itself with this awful music video:

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