Setback for Dotcom as Megaupload exec pleads guilty, sentenced to 12 months' prison

Programmer Andrus Nomm, described as one of the top six executives at Kim Dotcom's former file sharing service MegaUpload, has plead guilty to felony copyright infringement in the US and been sentenced to a year's jail, Ars Technica reports.

A rapid-fire process saw Nomm arrested in the US state of Virginia last week after waiving his right to fight extradition from the Netherlands after a multi-year fight (he was first arrested in January 2012 shortly after the raid on Dotcom mansion). Virginia is the state where most of Megauploads servers were located before being shut down by the FBI three years ago as copyright, racketeering, money laundering and other charges were filed against Kim Dotcom and his co-accused.

Nomm's sentence is relatively light. Earlier this week, Dotcom's US attorney Ira Rothken speculated to NBR that Nomm has struck a plea bargain with authorities.

It's not yet clear if Nomm agreed to testify against Dotcom and his co-acussed, but authories say he did reach a plea agreement. Court papers say Nomm admitted he knew copyright-violating material was on Megaupload:

Nomm agreed that the harm caused to copyright holders by the Mega Conspiracy’s criminal conduct exceeded $400 million. He further acknowledged that the group obtained at least $175 million in proceeds through their conduct. Megaupload.com had claimed that, at one time, it accounted for four percent of total Internet traffic, having more than one billion total visits, 150 million registered users and 50 million daily visitors.

In a statement of facts filed with his plea agreement, Nomm admitted that he was a computer programmer who worked for the Mega Conspiracy from 2007 until his arrest in January 2012. Nomm further admitted that, through his work as a computer programmer, he was aware that copyright-infringing content was stored on the websites, including copyright protected motion pictures and television programs, some of which contained the “FBI Anti-Piracy” warning. Nomm also admitted that he personally downloaded copyright-infringing files from the Mega websites. Despite his knowledge in this regard, Nomm continued to participate in the Mega Conspiracy.

Dotcom and his co-accused face an extradition hearing due to start in June.

If the former Megaupload boss felt any malace against Nomm for striking a plea deal, he wasn't showing it on Twitter.

In a series of posts, Dotcom expressed sympathy for what he described as an innocent programmer who wanted to be reunited with his son as soon as possible.

Earlier this week, Rothken told NBR it's likely that US authorities had “taken advantage” of Mr Nomm’s deteriorating financial situation.

"In some ways it was to be expected. He has low resources and can’t really afford counsel in either the Netherlands or the US but his name was barely mentioned in the indictment,” Mr Rothken said.

"So long as he is being truthful there is no concern at all. The US has access to all email communications and this case is an experimental case of first impression where, unlike a number of other cases, we’re basically saying there is no criminal law in the US of secondary copyright infringement so there’s not much one could say that would change that."

No different from YouTube
Rothken has long argued that Megaupload was no different from file sharing services like Dropbox and YouTube. Critics says that, unlike YouTube, Megaupload never paid any money to artists but did offer cash incentives to uploaders.

Dotcom also said today that the families of Megaupload defendants have had assets unfrozen in Germany, and that he would continue to pursue efforts to have his funds unfrozen in Hong Kong and NZ so as to not be put in the same under-resources situation as Nomm.

The Megaupload's immedate financial situation is difficult to discern. Late last year he said he was broke after spending more than $10 million in legal fees, but also said at his extradition hearing that he had made more than $40 million since his January 2012 arrest, mostly from selling shares in two new ventures he founded, Mega and Baboom.

Earlier this year, Dotcom reiterated his offer to return to the US to face charges if he was guaranteed bail and his assets were unfrozen. The DOJ says his assets are ill-gotten, so not his to get back.