Following LulzSec’s defacement of The Sun on Monday, the FBI swooped down on Anonymous and arrested 16 people in several states for allegedly attacking PayPal.

A federal indictment against 14 of the arrested accuses them of launching a Ddos (denial of service) against PayPal after it closed down a Wikileaks donation account.

LulzSec hacked Rupert Murdoch’s The Sun last Monday. A redirect sent users to a web page claiming the corporate media magnate died of a drug overdose.

In addition to the defacement, LulzSec members said on Twitter they had made off with emails from The Sun‘s now defunct sister newspaper, News of the World. The shadowy hacktivist group is said to also have hacked other Murdoch properties including News International and the Times of London in the hours following the first attack.

On Tuesday, members of Anonymous and LulzSec said they would release the email and passwords from the now defunct Murdoch newspaper. “Sun/News of the world OWNED. We’re sitting on their emails,” a hacker known as Sabu tweeted last Tuesday.

Murdoch is currently under investigation in a phone hacking scandal. It is alleged that employees working for the tabloid newspaper News of the World hacked celebrities, politicians, members of the British Royal Family, and others beginning in 2006.

Suspects in the PayPal case were arrested in Alabama, Arizona, California, Colorado, Washington DC, Florida, Massachusetts, Nevada, New Mexico and Ohio, according to a statement released by the Department of Justice and the FBI. The indictment claims members of Anonymous conspired to “intentionally damage protected computers at PayPal” between December 6-10, 2010, as part the group’s “Operation Avenge Assange.”

Suspects connected to the case were separately arrested in Florida and New Jersey while British police arrested one suspect and Dutch authorities four.

The FBI claims it traced internet protocol addresses of the hackers to Canada and then to California where one of the IP addresses used a virtual server for the attack. A separate investigation revealed Ddos attacks came from a server based in Texas.

In June, accusations surfaced claiming a member LulzSec is a Marine who works for military intelligence.

Arrests in the PayPal case arrive a few days after the Pentagon asked the private sector to join in a pilot program dubbed “Strategy for Operating in Cyberspace.” The plan envisions a unified plan incorporating DoD’s military, intelligence and business operations. It calls on AT&T, Verizon, and other telecoms and defense contractors to play a role.

The plan includes an effort for private companies to share information with the Defense Department and the Department of Homeland Security.

The Pentagon’s pilot program came after a March 24 cyber attack against an unnamed defense company. Around 24,000 of that company’s files containing military secrets were allegedly hacked into.

Two months later, defense contractor Lockheed Martin claimed it was the victim of a cyber attack of undisclosed magnitude.