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YouTube Scammer Who Fraudulently Collected $23 Million In Royalties Pleads Guilty

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(Hypebot) — It was an astoundingly successful scam. But it certainly wasn’t a complicated one.

by Tim Cushing of TechDirt.

YouTube content moderation — including the prevention of copyright infringement — is almost completely automated. It has to be. As of 2019, more than 500 hours of content were uploaded to YouTube every minute. Machines have to do the work because human moderation is no longer possible.

That’s what makes Content ID severely exploitable. And the heavy hand of incumbent content industries ensure the automated process is considered infallible, which has naturally resulted in thousands of bogus copyright claims that adversely affect content creators and their channels.

A system like this is just waiting to be gamed. And it has been by scam artists, unethical content creatorsmajor IP holders ensuring not a single second of content goes unmonetized, and bad faith efforts seeking to silence people.

What’s so surprising about this scam isn’t that it happened. That part was inevitable. It’s that it went on for so long and was so lucrative. The pair behind this multi-million dollar scam was indicted last year, but only after a four-year run that generated more than $5 million a year.

The case – United States of America vs. Webster Batista Fernandez and Jose Teran – reveals a massive Content ID scam that generated more than $20 million for the 36 and 38-year-old from Scottsdale, Arizona, and Doral, Florida.

The basics are straightforward. Starting sometime in 2017 through to at least April 30, 2021, Fernandez and Teran began monetizing music on YouTube for a vast library of more than 50,000 songs, none of which they owned the rights to.

The pair falsely represented to YouTube and an intermediary company identified only by the initials A.R. that they were the owners of the music and were entitled to collect “royalty payments” from their use on YouTube. In some cases the defendants used forged documents claiming to be from artists declaring that the pair had the rights to monetize their music.

It’s not like YouTube hadn’t been notified.

Complaints are not hard to find. Large numbers of YouTube videos uploaded by victims of the scam dating back years litter the platform, while a dedicated Twitter account and a popular hashtag have been complaining about MediaMuv since 2018.

But due to the precarious relationship between YouTube and the many, many rightsholders that have managed to bend it to their will, those making claims on content will most often be given the benefit of a doubt. Those complaining about wrongful claims are ignored, if not removed from the platform altogether.

There’s (sort of) a happy ending here. One of the scammers has plead guilty and will now be watching a lot of their (expensive) possessions be sold off by the government to satisfy (part) of a $25 million judgment — one that will apparently actually funnel the money to content creators who were screwed by this scam.

A man at the center of a copyright scam that abused YouTube’s Content ID system to fraudulently obtain more than $23m to the detriment of artists has entered a plea agreement with the US government. Webster Batista Fernandez wrongfully claimed to own the rights to more than 50,000 tracks and illegally monetized user uploads for years.

According to the plea agreement [PDF], Fernandez and his crew searched YouTube for songs not being monetized, uploaded their own mp3s, sent out copyright claims on the existing uploads, and began raking in the cash. Access to YouTube’s content management system was obtained after Fernandez convinced YouTube he and his company (MediaMuv LLC) had a library of 50,000 songs it wished to monetize. Fake email accounts, fake people, fake music labels… and all this went towards draining actual creators of $5 million in royalties per year.

It was an astoundingly successful scam. But it certainly wasn’t a complicated one. It’s a scam anyone with a handful of email addresses and the willingness to shell out a few bucks to generate official paperwork for a shell LLC can accomplish. And it points to one of the biggest weaknesses in YouTube’s anti-infringement efforts: the platform does not have the necessary amount of time, much less personnel, to sniff out scammers before they walk away with a whole lot of money and/or destroy the livelihoods of legitimate content creators. This is because the system is skewed to believe those flexing IP rights rather than those whose content may have been flagged inadvertently or maliciously. That approach leaves victims out in the cold while rewarding malicious abusers of the system with undeserved profits.

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