In 2021, the US Department of Justice launched a criminal proceeding against two men suspected of running a massive YouTube Content ID scam.
YouTube’s flagship anti-piracy system is supposed to protect rightsholders but, in this case, it was used to exploit them.
Multi-Million Dollar Scam
The scammers’ company, MediaMuv LLC., wasn’t a direct member of the Content ID program. Instead, it operated through a trusted third-party company, which had access to the platform.
By falsely claiming to own the rights to more than 50,000 copyrighted songs, the scammers generated more than $23 million in revenue.
In 2022, the first defendant confessed to his part in the copyright swindle by pleading guilty. Webster Fernandez admitted it was a simple scheme: find Latin music that wasn’t yet monetized on YouTube and claim the content as their own.
In February of this year, the second defendant pleaded guilty. Jose Teran signed a plea agreement admitting that he was part of the conspiracy, engaging in wire fraud and money laundering.
The guilty pleas may have helped to reduce their sentences but the defendants didn’t get off easily. This summer, a federal court in Arizona handed a 70 month prison term to Mr. Teran, to be followed by three years of probation.
A few weeks later, the same court sentenced Mr. Fernandez to 46 months in prison for his role in the conspiracy, to be followed by three years of supervised release.
In addition to the jail time, both convicts had to forfeit multiple possessions related to their crimes, including bank accounts, several pieces of real estate, and cars.
$3.3 Million Restitution
At the time of the sentencing, the authorities requested victims of the YouTube Content ID scam to come forward, as they are entitled to restitution. The MediaMuv operation mostly targeted Spanish language artists, who were not monetizing their content on YouTube yet.
Over the past several weeks, hundreds of these artists submitted their claims, ranging from a few dozen dollars, to well over $100,000. Some of these artists were represented by lawyers or their label and the RIAA submitted a claim on behalf of artists as well.
All told, the U.S. Attorney’s Office and defense attorneys agreed to a total restitution amount of more than $3.3 million, which is due immediately.
“The United States, counsel for Webster Batista, and counsel for Jose Teran, respectfully stipulate to the restitution amount of $3,365,352.85,” the stipulation reads.
“Along with the other standard conditions concerning the repayment of restitution, the parties agree that Webster Batista and Jose Teran will be jointly and severally liable for the restitution, restitution is due immediately, and Batista and Teran be ordered to make minimum monthly payments..”
A quick tally shows that roughly 800 affected artists came forward. One of the largest claims comes from Cecilia Ramirez, widow of the Mexican singer-songwriter Agustín Ramírez, who was the frontman of the band Los Caminantes. Ramírez passed away last year.
The RIAA’s claim totals $1,247,719.76 and is based on falsely claimed music of hundreds of artists, as detailed in this 57-page exhibit.
Both convicted defendants are jointly and severally liable for the restitution payments. How long it will take to repay the affected artists will depend on their income and available funds.
A copy of the joint stipulation on the restitution amount is available here (pdf). The amount was agreed upon by all parties and granted by the Arizona federal court earlier this week.