Two scammers in the US made fake copyright claims on songs uploaded to YouTube for around four years and pocketed $23 million (R374.62 million) in royalties for Latin music rights they did not control, Billboard reports.
The pair — Jose Medina Teran and Webster Batista Fernandez — operated a local recording studio called Digitlog in Phoenix, Arizona.
Locals were astounded when the small-time business owners started living lavishly, driving around in Lamborghinis and sporting diamond-encrusted jewellery.
But in November 2021, the curtain on their sudden surge in wealth came down when the Internal Revenue Service charged them with 30 counts of conspiracy, wire fraud, money laundering, and aggravated identity theft.
While Teran has pleaded not guilty to the charges, Batista took a plea deal on one count of wire fraud and one count of conspiracy and provided information about how the two pulled off their scheme.
Documents filed in the Arizona federal court explained they had concocted a company called MediaMuv to claim master and publishing royalties on numerous songs by artists like Daddy Yankee, Anuel AA, and Julio Iglesias.
They made most of their claims through digital rights management company AdRev, which fell for fake documents provided by the pair claiming to prove ownership over the music.
AdRev also allegedly gave MediaMuv direct access to YouTube’s content management system (CMS), allowing them to claim copyrights directly.
Fraudulent royalty claims are a significant problem on YouTube, where scammers typically claim small fractions of songs used in videos that might have gone unnoticed by the actual rights holder.
Although YouTube’s CMS and Content ID features are considered efficient tools to help monitor royalty collection, they aren’t readily available to small-time artists and songwriters unless they work through larger production companies.