Two Men Allegedly Stole $29 Million in Music Royalties From YouTube

Two Men Allegedly Stole $29 Million in Music Royalties From YouTube

Two men have been accused of a $US20 (A$29) million, years-long music royalties heist from a certain company identified as “Y.T.” Federal prosecutors do not explicitly name “YouTube.” We can glean from court documents, however, that “Y.T.” is a website that hosts uploads and uses the exact same monetisation and content ID mechanisms as YouTube. And well, there’s really only one site like YouTube.

A public affairs officer for the U.S. Attorney’s Office was unable to confirm the identity of the company, and YouTube has not responded to Gizmodo’s request for comment.

According to court documents (first reported by MarketWatch), Webster Batista, aka “Yenddi” and Jose Teran, aka “Chanel” fraudulently claimed royalty rights to over 50,000 songs through LLCs which sounded like record labels. A grand jury has charged them with conspiracy, wire fraud, identity theft, and money laundering.

As told in court documents filed in the U.S. District Court of Arizona, the men more or less simply claimed to be the copyright holders, and that was that. They told “A.R.,” the company that administers “Y.T.” royalty payments, that their company “MediaMuv” owned the copyright for a library of over 50,000 songs. They signed a contract with A.R., which tagged and uploaded the music for MediaMuv. They started collecting revenue. This went on from 2017 to April of 2021.

“Y.T.” approved them for content ID, YouTube’s automated system which hypothetically identifies matching songs from other users’ uploads and allows the content ID holder to claim revenue from their ads, if they choose. They also signed a sound recording and audiovisual content licence (this), which hypothetically allows Google to widely offer the music to users in exchange for monetisation revenue.

The first song named is “Viernes Sin Tu Amor,” from which they allegedly collected $US24,000 (A$34,260). This was followed by “La Quise Tanto,” which brought in over $US30,000 (A$42,826), and “Me Llamas,” which made them over $US100,000 (A$142,754). (Various artists have titled tracks “Me Llamas,” but most prominently Piso 21’s massive hit with over 700 million views on YouTube.)

Prosecutors allege that over time, the money moved around between companies with similar-sounding names — Elegre Records, Musika Ink LLC, MuveMusic LLC. Said companies’ bank accounts were allegedly used to purchase a $US550,000 (A$785,147) house, a $US130,000 (A$185,580) Tesla, a $US92,000 (A$131,333) BMW, and $US62,000 (A$88,507) in jewellery. Batista got a Pennsylvania ID under a fake name.

In 2018, someone claiming to be a rightsholder (“D.H.”) caught on and reported MediaMuv to the royalties administrator. Teran doubled down and implied that the person was just running the same scam, claiming to deserve royalty money “just because he say [sic] he has the right to.”

IRS agents arrested Batista at his home in Florida on November 18th. According to the U.S. Attorney’s Office, they could each face a cumulative 37 years in prison and up to $US250,000 (A$356,885) for each felony conviction.

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