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Originally Posted by FlameOn
Apparently the racketeering charges stem from the fact that on megavideos they collect ad revenue and have charge "premium" users fees to skip ads. 
The staff working at the company have been indicted as well.
This is a site that complied with DMCA take-down requests too. So really, its not too different than youtube, mediafire or the like.
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According to the indictment, not really.
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For instance, the “abuse tool” allegedly does not remove the actual file being complained about by a rights holder. Instead, it only removes a specific Web address linked to that file—but there might be hundreds of such addresses for popular content.
In addition, the government contends that everything about the site has been doctored to make it look more legitimate than it is. The “Top 100” download list does not “actually portray the most popular downloads,” say prosecutors, and they claim that MegaUpload purposely offers no site-wide search engine as a way of concealing what people are storing and sharing through the site.
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This arstechnica article goes into more detail on why they were taken down. Why they save those emails I have no idea, so dumb.
Why The Feds Smashed Megaupload