MegaUpload, one of the world's largest file-swapping sites (actually one of the world's largest websites, period) was shut down yesterday by the US Justice Department and ICE. According to a federal indictment, seven individuals and two companies involved in the website are have been engaging in "a racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering and two substantive counts of criminal copyright infringement." The result? A massive sting operation resulting in arrests and property seizures across multiple continents.

The move is a curious one given that similar cyber-locker services have been declared legal around the globe, the company had been voluntarily showing up in court to civil copyright proceedings, and claims to have been adhering to DMCA takedown requests.

According to the DOJ however, this cooperation was only skin deep, and both ICE and DOJ are appear to have e-mails showing the company was consistently aware they were making a killing off of copyrighted files -- that documented awareness resulting in them losing their protection under the DMCA.

The width and breadth of the global police action are simply massive, and are, quite justly, being painted as a massive over-reach. The full indictment goes so far as to mention Canadian bandwidth provider Cogent, whose headquarter employees were even held and questioned during the raids this week. Indeed, anybody who provided bandwidth, rack space or Internet services appears to have been held, questioned, and/or pressured in the global raids.

There's plenty of questions popping up around the raids, most notably being why exactly the government feels the need to push for SOPA/PIPA when they were able to extend their copyright assault globally so easily. The intensity of the action is also being questioned, given the United States seized a Dutch citizen in New Zealand over a copyright claim, despite the fact the company involved had been cooperating in the courts. Despite the clear trade in copyrighted files, many of the files on MegaUpload were legitimate, and systems were in place to remove copyrighted content.

The reality is that the company was supported by many artists and had also been building a system that directly compensated artists. The crime wasn't conspiracy -- it was cutting out the RIAA/MPAA middle men. Then flaunting it.

The timing of the effort is also bizarre given the outrage surrounding SOPA/PIPA, layered on existing outrage over a lack of financial sector accountability for the U.S. economic collapse. While those crimes were ignored, this indictment is chock full of language that applies nefarious implications on routine business practices (routine money spent on advertising and other business expenses is repeatedly deemed part of the "Mega Conspiracy"), and the RIAA/MPAA-style language of the indictment certainly doesn't quell the notion that the entertainment enjoys using the full power of the United States government as their personal plaything.

With the White House's recent statement against SOPA/PIPA upsetting the MPAA and RIAA, the government apparently wanted to make it very clear that Hollywood's campaign contributions were still very much appreciated.