After a lengthy legal battle, last February the founders of The Pirate Bay were ordered by the Swedish Supreme Court to pay $675,000 to music labels in order to compensate artists who lost out on royalties due to piracy. Except that might not be the case at all, according to TorrentFreak, who say the compensation will be used to line the pockets of the Swedish IFPI, an anti-piracy body that claims to represent the worldwide recording industry.

As a result of the original verdict being upheld at the defendants' last avenue of appeal, Peter Sunde, Fredrik Neij, Gottfrid Svartholm and Carl Lundström were ordered to serve their jail terms as well as pay an additional €50,000 to several music industry companies, including EMI Music, Sony Music and Universal Music, specifically for compensating artists and rightsholders for the losses they suffered.

However, it appears that the music companies have struggled to collect the money due. According to an unpublished document, believed to be from the legal department at IFPI, they have been unable to collect any assets because the convicted have nothing of value in the country.

"We have filed applications with Sweden's Enforcement Agency to secure assets to satisfy these funds. So far very little has been recovered as the individuals have no traceable assets in Sweden and the Enforcement Agency has no powers to investigate outside Sweden. There seems little realistic prospect of recovering funds," the document read.

While that is troubling enough, what comes next will be nothing short of disturbing for the rights holders expecting compensation. "There is an agreement that any recovered funds will be paid to IFPI Sweden and IFPI London for use in future anti-piracy activities," IFPI writes.

"As far as I know, no money ever won in a lawsuit by IFPI or the RIAA has even gone to any actual artist," Peter Sunde of The Pirate Bay said upon hearing the news. This isn't the first time anti-piracy outfits have kept the money awarded either. The RIAA previously told TorrentFreak that "any funds recouped are re-invested into our ongoing education and anti-piracy programs."