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Customs Freezes Megaupload Assets

10 September 2012

Customs Freezes Megaupload Assets

Hong Kong Customs, working with the US Department of Justice and the Federal Bureau of Investigation, seized digital evidence and more than HK$300 million (US$38.7 million) of alleged crime proceeds as part of the global takedown of cyberlocker Megaupload.

One hundred officers from the Intellectual Property Investigation Bureau, Financial Investigation Group, Anti-Internet Piracy Team and Computer Analysis and Response Team searched four target locations, including hotel rooms, company offices and domestic premises in Hong Kong, according to a Customs statement. The assets have been frozen in accordance with related ordinances while the operation is on-going.

During the investigation, Customs found that the hotel rooms rented by the syndicate for office use and rest area were luxury suite rooms, which rented for HK$100,000 per day. The rooms were equipped with a number of large-scale high-speed servers and large-model TV screens, which are suspected to be in connection with the case.

Investigation reveals that the cyberlocker has been engaged in infringing activities (e.g. pirated songs, TV dramas and movies) for more than five years with earnings more than US$175 million. The cyberlocker has set up a network of devices and servers with their operators located in different jurisdictions, with its main servers located in the US whereas some registered companies and some bank transactions are in Hong Kong. The company bars Hong Kong netizens – those using a Hong Kong IP address as identification – from accessing its contents in a bid to hinder investigation by law enforcement agencies.

Customs has been aggressive in targeting intellectual property rights infringement on the internet. Hong Kong Customs detected 65 cases and seized HK$1.18 million worth of infringing goods, including pirated optical discs, counterfeit bags, leather goods, clothing and computers, in 2011, which is similar to that of 2010. However, there was an increase of infringing activities via the social networks and the number of cases rose from eight in 2010 to 19 in 2011.

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