The U.S. Government is trying to get their hands on the assets of Kim Dotcom and his fellow defendants through a civil lawsuit, claiming that they are the proceeds of crime. Megaupload's legal team is striking back against these allegations and informs the court that the Government's case is built on nonexistent crimes.

Acting on a lead from the entertainment industry, the U.S. Government shut down Megaupload early 2012.

Since then the case hasn’t progressed much. Kim Dotcom’s extradition hearing has been delayed until 2015 and most of the recent court proceedings dealt with how the seized assets should be handled.

Two months ago the Department of Justice launched a separate civil action in which it asked the court for a forfeiture of the bank accounts, cars and other seized possessions of the Megaupload defendants, claiming they were obtained through copyright and money laundering crimes.

Megaupload has now responded to these allegations at the federal court in Virginia, with a motion to dismiss (pdf) the complaint. According to Megaupload’s lawyers the Department of Justice is making up crimes that don’t exist.

One of the main arguments is that the Government accuses the Megaupload defendants of secondary criminal copyright infringement, a crime that doesn’t exist under common law.

“The crimes for which the Government seeks to punish the Megaupload defendants do not exist. Although there is no such crime as secondary criminal copyright infringement, that is the crime on which the Government’s Superseding Indictment and instant Complaint are predicated,” Megaupload’s lawyers write.

“That is the nonexistent crime for which Megaupload was destroyed and all of its innocent users were denied their rightful property. And that is the nonexistent crime for which the Government would now strip the criminal defendants, and their families, of all their assets,” they add.

In addition, Megaupload mentions another argument why the Court doesn’t have jurisdiction over the case. It’s a requirement that the infringements took place in the United States, but the DOJ’s compliant fails to back that up.

“Tellingly, the Complaint and the Superseding Indictment together fail to identify a single instance in which an act of infringement — particularly an unauthorized upload or download — occurred entirely within the United States,” the motion reads.

This is true for the alleged infringements committed by Megaupload users and also for the 50 Cent track Kim Dotcom allegedly distributed himself. There is no mention or proof that this infringement took place in the United States.

“Although the Complaint alleges that Kim Dotcom personally distributed a link to a copy of a copyrighted work on, and has received at least one infringing copy of a copyrighted work from, the Mega Sites, the Complaint never alleges where that occurred,” the lawyers argue.

Based on these and several other arguments Megaupload’s legal team has asked the Court to dismiss the DOJ’s complaint. At the very least, they want the case to be put on hold until the criminal case is completed.

TorrentFreak spoke with Megaupload lawyer Ira Rothken who explains that this is the first time that they called out the Government for prosecuting “nonexistent” crimes.

“For the first time in the case, with this motion to dismiss, we are attacking the merits of the DOJ’s core copyright claims. We are optimistic that the Court will find that there is no such thing as criminal secondary copyright infringement,” Rothken tells TorrentFreak.

The Government’s efforts are no surprise to Megaupload’s legal team. The civil attempt to obtain possession of the assets fits a pattern of meritless claims according to Rothken.

“The DOJ is trying to win the Megaupload case on procedure rather than the merits,” Rothken told us.

“We are hopeful the US Court will finally decide the threshold copyright issues in Kim Dotcom’s and Megaupload’s favor and bring this global legal matter to a rapid end.”