US accuses two men of carrying out $ 20 million YouTube content identification scam * TorrentFreak
To protect copyright owners, YouTube uses an advanced piracy recognition system that flags videos or music used on user channels without permission.
Through this “Content ID” system, counterfeit content can be removed or monetized by channeling advertising revenue to copyright owners, which can be very lucrative for the rights owners in question.
YouTube has previously said it paid rightsholders $ 5.5 billion in advertising revenue for content claimed and monetized through Content ID, but the system doesn’t always work exactly as expected.
Over the years, countless YouTube users have complained that their videos have been claimed and monetized by entities that seemingly have no right to do so, though, fearing what a complaint might have on the state of affairs, many chose to withdraw from the battles they feared losing.
Until now, the extent of this problem has not been clear, but a scandal revealed in unsealed court documents in Arizona now sheds light on the obscure world of Content ID abuse.
Grand jury indictment
The case – USA v Webster Batista Fernandez and Jose Teran – reveals a massive Content ID scam that generated over $ 20 million for 36- and 38-year-olds from Scottsdale, Arizona, and Doral, Florida.
The basics are simple. From 2017 until at least April 30, 2021, Fernandez and Teran began monetizing music on YouTube for a huge library of over 50,000 songs, to which they did not own any rights.
The couple falsely told YouTube and an intermediary company identified only by the initials AR that they were the owners of the music and that they were entitled to collect “royalties” from their use on YouTube. In some cases, the defendants have used false documents claiming to be from artists stating that the couple had the right to monetize their music.
The accused and their scam
Batista is a citizen of the Dominican Republic, President of Musika LLC, CEO of MediaMuv LLC, and a member and statutory agent of Elegre Records LLC. Teran is an Arizona resident, the registered agent of Musika Inc LLC, the agent of VA Music Inc (a member of MediaMuv LLC) and the owner of MuveMusic LLC.
On or around April 21, 2017, Batista and Teran (via MediaMuv) entered into a contract with AR, an entity that administers and makes payments to those who claim music on YouTube. In his contract, MediaMuv claimed he was “the writer, author, publisher, copyright holder and creator” of a huge library of musical works. The company has also assured that it will not infringe the rights of third parties in any way.
After assuring that it would not provide any content to AR if it suspected that any of the submitted content was not licensed for commercial use and monetization, MediaMuv said the music library of over 50,000 tracks was hers and uploaded it to YouTube.
AR was then responsible for enforcing MediaMuv’s content claims on YouTube and paying the required “royalty payments”.
$ 20,776,517.31 in fraudulent claims and payments
According to the indictment, over the course of nearly four years, AR paid the defendants over $ 20.77 million while the artists who actually created the tracks received absolutely nothing. Identified only by their initials, some of the artists who should have received compensation include JLP ($ 132,702), LC ($ 128,339) and CP ($ 102,626).
The actual payouts to these artists were $ 0 as Batista and Teran appear to have taken it all. The expense events listed in the indictment and performed by the defendants include $ 546,000 for the purchase of a property, almost $ 130,000 on a 2017 Tesla, over $ 92,000 on a BMW i8 and $ 62,500 on jewelry.
Given the fraudulent nature of the contract, YouTube paid the couple a huge sum that should have gone to the real artists and creators. Thirty of the top-grossing artists are listed by initial in the indictment, but many more are clearly affected. However, a large number of YouTubers have also fallen victim to the scam whose downloads were flagged by YouTube and AR as counterfeit and then monetized by Batista and Teran.
Complaints are not hard to find. A large number of YouTube videos uploaded by victims of the scam dating back years litter the platform, while a dedicated Twitter account and one popular hashtag have been complaining about MediaMuv since 2018.
As early as 2017, complaints were made to the YouTube / Google support forums, with only one receiving more than 150 responses.
“I want to make a complaint through this place, because a few days ago a company called MEDIAMUV STOLES CONTENT FROM MY CHANNEL AND OTHER USERS, does anyone know anything about this company?” we read.
“[I] investigated and there is nothing in this regard. I only found one channel saying that multiple users get robbed and that when they come to download their own songs, MEDIAMUV detects the videos as theirs.
Charges in the indictment
Batista and Teran are charged with thirty counts of conspiracy to commit electronic fraud, money laundering and aggravated identity theft.
The indictment also seeks the forfeiture of all property related to the couple’s offense, including property in Phoenix, Arizona, the contents of two bank accounts, a Tesla and a BMW.
The indictment is available here (pdf)