Megaupload Piracy Case Takes Shocking Turn

The case against Megaupload.com, the Hong Kong-based file-hosting website accused of providing illegal access to copyright-protected media files, has now been dealt a critical blow.

A New Zealand judge has ruled that the search warrants used by police in that country to raid the home of Megaupload's leading members were illegal.

Megaupload sites were shut down in January by the United States Department of Justice (DoJ) after the owners were indicted on charges of copyright infringement. At the heart of the scandal was Kim Dotcom, a.k.a. Kim Schmitz, a German national and current New Zealand resident, who has been called Megaupload's "kingpin".

Megaupload Brass Net $175M Since 2005

According to the U.S. Federal Bureau of Investigation (FBI), Dotcom and his alleged accomplices (three others were arrested with him) are guilty of copying and directing media files. In the process, they reportedly netted themselves a whopping $175 million since 2005.

Observers believe Megaupload had approximately 180 million users when it was shut down. (Source: latimes.com)

Dotcom's lawyers have insisted that the company was simply responsible for online storage, and did not copy any copyrighted materials.

Judge: FBI General Warrants "Invalid"

A key part of the case against Megaupload revolves around the legality of the search warrants that supported the raid on Dotcom's home in New Zealand. On Thursday, June 28, 2012, New Zealand High Court Judge Helen Winkelmann ruled that the warrants, which were also used to seize property from Dotcom's Auckland estate, were not properly drawn up.

Furthermore, Judge Winkelmann ruled that the FBI acted illegally in copying data from Dotcom's computer and taking it out of the country.

"The warrants did not adequately describe the offences to which they related," Winkelmann explained in her ruling. "Indeed they fell well short of that. They were general warrants, and as such, are invalid." (Source: reuters.com)

It's currently unclear what impact this ruling will have on the FBI's case against Megaupload. However, observers say it's obvious that the loss of key pieces of evidence obtained under the warrants will weaken the prosecution's case against Dotcom.