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TL;DR: Two men face decades in prison and millions of dollars in fines for allegedly stealing $20 million in royalties from a company that is almost certainly YouTube. How did they pull it off? Simply by claiming they owned the rights to over 50,000 Spanish-language songs.
MarketWatch reports that Jose “Chanel” Teran, 36, of Scottsdale, Arizona, and Webster “Yenddi” Batista, 38, of Doral, Florida, are accused of fraudulently claiming their company, MediaMuv, owned the rights to the songs.
The scheme began in 2017 when they are alleged to have approached a third-party royalty management firm identified only as A.R. In some instances, forged notes from the artists in question were used to claim the pair managed the music rights.
A company that the court documents identify as Y.T., presumably YouTube, approved the pair for the platform’s Content ID system, which is supposed to identify songs that appear in video uploads so rights holders can claim ad money. They also signed a sound recording and audiovisual content license that allows Google to offer the music to users in exchange for monetization revenue, writes Gizmodo.
One of the tracks, Piso 21’s ‘Me Llamas,’ earned Teran and Batista over $100,000 through the video’s 700+ million YouTube views.
In 2018, MediaMuv was reported to the royalties administrator by someone claiming to be a rightsholder to one of the songs in its catalog, but Teran said someone didn’t deserve royalty money “just because he say [sic] he has the right to,” which is precisely what the pair were doing, allegedly.
The scam continued until April 2021, by which time it had brought in over $20 million. Some of the money was used on a $550,000 mansion, $129,000 went on Teslas, $93,000 to buy a BMW hybrid, and $62,000 on jewelry.
Teran and Batista have been charged with 30 counts of conspiracy, wire fraud, money laundering, and aggravated identity theft. They face a cumulative 37 years in prison and a fine of up to $250,000 for each felony conviction.