By posing as legitimate music rights owners, two men managed to extract more than $23 million in revenue from YouTube's Content ID system. Both were arrested and sentenced to prison. In the wake of the criminal case, hundreds of disadvantaged artists came forward and the court has now ordered the scammers to pay $3.3 million in restitution.
In 2021, the US Department of Justice released a criminal process against two men suspected of running a massive YouTube Content ID scam.
YouTube's iconic anti-piracy system is supposed to protect rights holders, but in this case, it was used to exploit them.
Multi-million dollar scam
The scammers' company, MediaMuv LLC., was not 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 involvement in the copyright scam by pleading guilty. Webster Fernรกndez admitted it was a simple plan: find Latin music that wasn't already monetized on YouTube and claim the content as his own.
In February of this year, the second defendant pleaded guilty. Josรฉ Terรกn signed a plea agreement admitting that he was part of the conspiracy, participating in wire fraud and money laundering.
Prison sentences
The guilty pleas may have helped reduce their sentences, but the defendants did not get off easily unscathed. This summer, a federal court in Arizona issued a 70 months in prison to Mr. Terรกn, who will be followed by three years of probation.
A few weeks later, the same court sentenced Mr. Fernรกndez to 46 months in prison for his role in the conspiracy, which will be followed by three years of supervised release.
In addition to the prison sentence, both convicts had to lose multiple possessions related to their crimes, including bank accounts, various real estate and cars.
Restitution of $3.3 million
At sentencing, authorities asked victims of the YouTube Content ID scam to come forward as they are entitled to restitution. MediaMuv's operation focused primarily on Spanish-speaking artists, who were not yet monetizing their content on YouTube.
Over the past few weeks, hundreds of these artists filed their claims, ranging from a few dozen dollars to more than $100,000. Some of these artists were represented by attorneys or their label, and the RIAA also filed a claim on the artists' behalf.
In total, 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.
โThe United States, Webster Batista's attorneys, and Josรฉ Terรกn's attorneys, respectfully stipulate the restitution amount of $3,365,352.85,โ the stipulation reads.
โAlong with the other standard conditions regarding the payment of restitution, the parties agree that Webster Batista and Josรฉ Terรกn will be jointly and severally liable for the restitution, the restitution must be paid immediately, and Batista and Terรกn will be ordered to make minimum monthly payments. "
A quick count shows that approximately 800 affected artists showed up. One of the biggest complaints comes from Cecilia Ramรญrez, widow of the Mexican singer-songwriter Agustin Ramirez, who was the leader of the band Los Caminantes. Ramรญrez passed away last year.
The RIAA claim amounts to $1,247,719.76 and is based on falsely claimed music from hundreds of artists, as detailed in this 57 page exhibition.
Both convicted defendants are jointly and severally liable to pay restitution. The time it will take to reimburse affected artists will depend on their income and available funds.
A copy of the joint stipulation regarding the amount of restitution is available. here (pdf). The amount was agreed upon by all parties and awarded by the federal court in Arizona earlier this week.
