Feds Deny They Entrapped Megaupload

The case is not going so well for the U.S. government

Megaupload's contention that the authorities entrapped the now-shuttered file-sharing service is "baseless," the government said in a new court filing.

The brouhaha concerns part of the government's rationale to seize Megaupload domains and arrest its chief executive Kim Dotcom and his top lieutenants for running what the authorities claimed was a massive and illicit file-sharing service that cost Hollywood studios and other content makers some $500 million.

The nuanced flap comes nearly a year after Dotcom and crew were arrested in New Zealand, where they remain free on bail awaiting an extradition hearing on whether they can be tried on criminal copyright and money laundering charges in a Virginia federal court. What's more, Dotcom says that on January 19 he will unveil a new file-sharing service on the one-year anniversary of his arrest.