A major Internet content hosting website, Megaupload.com, its founders and employees have been charged by a U.S. grand jury over a massive copyright infringement scheme, the latest skirmish in a battle against piracy of movies and music.

The group, dubbed by prosecutors as Mega Conspiracy, was accused of engaging in a scheme that took some $500 million away from copyright holders and generated more than $175 million in criminal proceeds, according to the indictment unsealed on Thursday.

In exchange for payment, the Mega Conspiracy provides fast reproduction and distribution of infringing copies of copyrighted works from its servers located around the world, the indictment said.

A federal court in Virginia ordered that 18 domain names associated with the group be seized. Further, some 20 search warrants were executed in the United States and eight countries and about $50 million in assets and targeted sites were also seized.

The founders of the company - Kim Dotcom, who is also known as Kim Schmitz and Kim Tim Jim Vestor, and Mathias Ortmann - were charged. The company's chief marketing and sales officer, Finn Batato, head of development Sven Echternach and other company officials were also charged.

The charges included copyright infringement as well as conspiracies to commit racketeering, copyright infringement and money laundering.

Dotcom, Batato, Ortmann and another individual charged were arrested in Auckland, New Zealand, by local authorities on Thursday, the U.S. Justice Department said. Echternach and two others charged remain at large.

The charges emerge as Congress is struggling over legislation sought by the movie and music industry to crack down on Internet piracy and theft of its content. Major Internet sites like Google and Facebook complained that such legislation as it was drafted would lead to censorship.

(Reporting by Jeremy Pelofsky; Editing by Gary Hill)

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