The US Attorney's Office of Arizona on Wednesday announced the indictment of two men on charges that they defrauded musicians and associated companies by claiming more than $20m in royalty payments for songs played on YouTube.
The 30-count indictment against Jose Teran, 36, of Scottsdale, Arizona, and Webster Batista, 38, of Doral, Florida, was returned by a grand jury on November 16, 2021. It accuses the two men of conspiracy, wire fraud, transactional money laundering, and aggravated identity theft in connection with a scheme to steal YouTube payments.
"In short, Batista and Teran, as individuals and through various entities that they operate and control, fraudulently claimed to have the legal rights to monetize a music library of more than 50,000 songs," the indictment [PDF] alleges.
"Batista and Teran perpetrated their fraud by falsely representing to Y.T. [YouTube] and to A.R., an intermediate company responsible for enforcing their music library, that they were the owners of a wide swath of music and that they were entitled to collect any resulting royalty payments."
The government claims that around April, 2017, two men, through their company MediaMuv, LLC, entered into a contract with A.R., which administers and distributes YouTube royalty payments, claiming to control a 50,000 song catalog of music.
They subsequently sent the corresponding song files to A.R., which in turn uploaded the files to YouTube, the indictment claims. The court filing cites as an example the song "Viernes Sin Tu Amor," which A.R. is said to have uploaded to YouTube in 2017 and has earned around $24,000 in royalty payments since then.
This was allegedly done for numerous songs, with A.R. eventually, at the direction of the MediaMuv, writing to YouTube "to bulk clear potential copyright conflicts from MediaMuv's entire music catalog."
A.R. is not identified in the complaint but one plausible candidate for those initials is digital rights management firm AdRev (adrev.net). The indictment mentions as evidence an email message that was sent to "A.R. VP of Finance" at "email@example.com."
The Register has written to AdRev's VP of Finance, whose five-letter first name happens to start with a "P," to confirm that A.R. does in fact refer to AdRev. We've also asked whether the company would care to comment. We've not heard back.
YouTube did not immediately respond to a request for comment.
The attorney representing Teran also did not respond to a request for comment.
According to the USAO of Arizona, Teran and Batista used the $20m they obtained to acquire real estate, jewelry, and luxury cars, among other things.
If convicted, the two men face potential sentences of up to five years for conspiracy, up to 20 years for wire fraud, up to 10 years for transactional money laundering, and a mandatory two years for aggravated identity theft, with the additional possibility of fines up to $250,000 per felony conviction. ®