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Licensing Law: MediaMuv Charged With Stealing $20 Million in Music Royalties From YouTube

By Gary Symons

TLL Editor in Chief

Officials in Arizona have charged two men on allegations they defrauded YouTube of $20 million by falsely claiming they owned rights to more than 50,000 songs.

According to a statement from the US Attorney’s Office charges have been laid against Jose Teran of Scottsdale, Az. and Webster Batista, 38, of Doral, Fla. The allegations include conspiracy, wire fraud, transactional Mmoney laundering, and aggravated identity theft.

The two men are accused of defrauding musicians and YouTube for the royalties on up to 50,000 songs that they did not own, through their company MediaMuv.

In mid-November, a federal grand jury in Phoenix returned a 30-count indictment against Teran, and Batista. On Nov. 18, Special Agents with the Internal Revenue Service – Criminal Investigation arrested Batista at his residence in Florida.

Photos on Twitter showed the two accused men enjoying the high life, sailing on yachts, buying mansions, and showing off high-end sports cars.

According to the indictment, Teran and Batista falsely claimed they owned the royalty rights for music that was monetized through a third party company. While the indictment doesn’t mention YouTube, The Licensing Letter found copies of messages from YouTube to various artists, letting them know their music rights had been returned to them.

A screen grab from Twitter, showing a message from YouTube, returning music rights for the song Noche de Reyes to its rightful owner.

 

During that time, investigators say Teran and Batista collected more than $20 million in royalty payments that should have gone to the artists or rights holders for that music. Most or all of the music involved in the alleged fraud were Spanish-language songs.

Through their company MediaMuv, Teran and Batista allegedly first claimed they had the legal right to monetize over 50,000+ songs on Feb. 13, 2017. In some cases, prosecutors say Teran and Batista used forged notes from artists claiming they had the rights to manage the music.

“The indictment alleges that contractual agreements were executed between MediaMuv and two third party companies in which MediaMuv made false and fraudulent affirmations that they had legal rights over the music they claimed to control,” said the US Attorney’s Office. “Teran and Batista did not pay anything to the top 30 artists or their representatives, whose music generated royalties that the defendants collected.

“Teran and Batista allegedly used the identities of others to make false claims about ownership and to create the false impression that MediaMuv had other employees. The indictment further alleges that Teran and Batista used the fraudulent proceeds to purchase high-end items such as cars, jewelry, and property.”

Angry artists have reposted MediaMuv Twitter pics, including this one in which they inserted the headline ‘Ladrones #1 en YouTube’, which translates to #1 Robbers on YouTube.

The charges carry heavy penalties in the US, which has among the longest prison sentences in the world for fraud. If convicted, Teran and Batista face up to 5 years in prison for Conspiracy, up to 20 years for wire fraud, up to 10 years for transactional money laundering, and a mandatory consecutive sentence of 2 years for aggravated identity theft. They may also be fined up to $250,000 per felony conviction.

However, it’s worth noting that at this point the two men have been charged, but not convicted, and are presumed innocent until proven guilty. The case was investigated by the Internal Revenue Service’s Criminal Investigation unit, and is being prosecuted by the US Attorney’s office, led by Raymond Woo and Seth Goertz.

Internal Revenue Service – Criminal Investigation conducted the investigation in this case. Assistant U.S. Attorneys Raymond K. Woo and Seth T. Goertz, District of Arizona, Phoenix, are handling the prosecution.

Prosecutors do say, however, that the legitimate rights holders did fight back against what they saw as theft of their intellectual property, but initially were stonewalled by MediaMuv.

One artist, identified in court papers by the initials D.H., filed a complaint to a third-party management company claiming copyright infringement, but said Teran boldly insisted he had no legal rights to his own song.

“Any issue that [D.H.] have with our content, he can email me directly, we will not issue any revenue share to him or anyone just because he says he had a right to, we have contracts and if he has any doubts we can keep discussing this in front of a federal judge, thanks,” court documents quoted Teran as writing in an email.

Another example of the type of fraud alleged involved the hit ballad Me Llamas (Call Me) by Colombian pop group Piso 21. According to court documents, MediaMuv collected more than $100,000 in royalties for that one song.
Another song from the Los Caminantes earned MediaMuv $30,000 in payments.
The IRS also looked into what Teran and Batista did with their allegedly ill-gotten gains, tracking payments for expensive cars, houses and jewelry. Purchases included $129,000 to purchase cars from Tesla, $93,000 to buy a BMW hybrid car from a dealer in Beverly Hills, and $62,000 to buy jewelry from a store in Manhattan.
The largest single payment was for more than $500,000, used for the down payment of a large, luxury mansion on the outskirts of Phoenix.
https://www.thelicensingletter.com/actor-zach-avery-pleads-guilty-to-650-million-licensing-fraud/
https://www.thelicensingletter.com/songwriters-demand-musicians-stop-taking-credit-for-their-work/
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