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Feds buster Miami man in $ 20 million YouTube royalties scam

Music mogul Webster Batista and his business partner Jose Chenel Teran had it all: expensive cars, flashy jewelry, properties in Miami and Arizona, and a million-dollar media company. What they did not have was any legal right to the more than 50,000 songs they claimed to own over the past four years, in an alleged scam that cost real artists and content creators more than $ 20 million.

Federal authorities arrested Batista, who also goes by the pseudonyms Eniel Gaetan Hernandez and Yenddi, in the Miami suburb of Doral on November 18 on charges of fraud, money laundering, aggravated identity theft and conspiracy. He pledged $ 150,000 in bail plus a $ 100,000 bail, signed by his mother and ordered by a federal judge to move to Phoenix, Arizona, earlier this month, pending trial in January with Teran, his alleged conspiracy.

New Times tried to contact Miami’s attorney David Garvin, who represented Batista in a related case in Florida’s Southern District Court, but he did not respond to requests for comment by phone or email Monday. Teran’s attorney, Jason Mark Silver of Scottsdale, Arizona, also did not respond to requests for comment.

Through their Arizona-based business, MediaMuv, LLC, along with several shell companies and fake identities, Batista and Teran allegedly claimed to be the owners and creators of a large media library of more than 50,000 songs from a wide variety of genres, including Spanish. pop and anime video game soundtracks, and reaped $ 20,776,517 in royalties from YouTube without paying the real owners a penny. Although the trial is set to take place in Phoenix, where Teran lives and MediaMuv is based, the scam smells of Miami grief – and the alleged scammers’ manipulation of YouTube’s content identification highlights a serious weakness in the platform’s copyright policy.

According to a federal grand jury indictment, Batista, a citizen of the Dominican Republic, and Teran of Phoenix entered into a contract with a royalty processing company identified as “AR” on April 21, 2017. In the contract, the two claimed that their company was “the author, author, publisher, copyright holder and creator” of thousands of songs and that their content would not infringe any copyright or trademark.

The two claimed to have permission to upload more than 50,000 songs, including several tracks from Spanish artists from the 1970s to the early 2000s. They claimed ownership of songs like “La Quise Tanto” by Los Caminantes (which they received over $ 30,000 in royalties) and “Me Llamas” from 1979 by Juan Luis Perales (which gave them over $ 100,000 in revenue from YouTube), despite they had zero ownership of the tracks.

The federal indictment includes a table showing artists whose music MediaMuv claimed to own and how much money in royalties Batista and Teran have allegedly cashed. Only the artists’ initials are written in the indictment, although they correspond to artists who performed songs listed elsewhere in the document. The table says, for example, that MediaMuv received $ 132,702.45 in royalties from songs by JLP, which would be equivalent to Juan Luis Perales performing the aforementioned “Me Llamas.”

Artists and content creators caught the scam and started posting complaints about MediaMuv online.

In an online Spanish YouTube help forum, users started writing posts as early as May 2017, alleging that MediaMuv stole their music.

“Hello friends, I would like to make a claim on this forum as it is several days ago that a company called MediaMuv started stealing content from my channel and other users. Does anyone know anything about this business?” one user wrote on May 17, 2017. “MediaMuv claims videos as their own.”

In response, a forum moderator asked users to file a formal complaint through the YouTube Content ID process and linked to pages with more information.

According to the indictment, when an artist contacted MediaMuv’s royalty processor “AR” and claimed that MediaMuv was infringing their copyright, Teran told the company that any copyright claims should be made to him for his own control.

“Any problem that DH has [sic] with our content, he can trade directly with me, we will not issue any revenue share to him or anyone just because he says he has the rights to, we have contracts and if he has [sic] doubt we can continue to discuss this in front of a federal judge, thank you, “Teran sent an email to the royalties firm.

The Twitter account @fuckmediamuv started writing in January 2018 and warned others that Batista, Teran and their employees were “YouTube Content Thieves“- YouTube Content Thieves.

“Be careful with these YouTube content thieves,” tweeted @fuckmediamuv in his first post, which was accompanied by pictures of the two defendants with graphics of cartoon thieves and rats. “They live in Phoenix, Arizona.”

In 342 tweets posted over nearly four years, the site documented its claims with photos of Batista, Teran and those in their circle posing with expensive cars and properties, and retweeted complaints from YouTube content creators about MediaMuv.

The account posted photos of the luxury cars, including Teslas and BMWs, which the indictment says Batista and Teran bought with poorly earned gains from MediaMuv. @Fuckmediamuv also often wrote about two related parties who allegedly helped the couple launder money.

Under the Florida Division of Corporations website, several companies with addresses listed in Miami are active under the names of these parties, one of which shares the same business address in North Miami Beach as Xpace World Music Corp, which also lists one of the parties as its president, and was mentioned in the federal indictment.

According to the indictment, a bank account belonging to MuveMusic, another of Batista and Teran’s companies, transferred $ 486,902.76 to Xpace World Music on April 3, 2020.

In 2019, the alleged scammers branched out beyond songs by musical artists, claiming the copyright to audio tracks from popular video games.

In April 2019 YouTube user Ronald McOn[E]Punch released a video titled “Beware of All YouTubers Using Doki Doki Literature Club Content, Beware of These False Claims!”

Doki Doki Literature Club is a popular visual romance game with schoolgirls in a Japanese anime aesthetic. Most of the music for the game was composed by game developer Dan Salvato, but YouTubers who made videos of themselves, play the game, or use the game’s music would receive Content ID claims from MediaMuv, who said they owned the rights to the music and therefore had rights to any advertising revenue from the content.

YouTube’s Content ID system uses software that scans videos for copyrighted content such as music and cross-references to the material with their database of content claimed by the owners. A copyright owner is then warned that their content will be used in someone else’s video, after which they can choose to have the video removed or leave the video up, but claim the entire ad revenue from that user’s upload.

YouTube’s content creators have been complaining for years that the Content ID system is too sensitive and does not follow US legal doctrine of fair use, which allows people to use copyrighted material if they do so in a transformative way, such as making fan-edited videos of scenes from popular games.

YouTube Director Katherine Oyama testified before the U.S. Senate in 2020 that the majority of videos claimed via Content ID were monetized rather than removed, and that YouTube had paid out more than $ 5.5 billion in advertising revenue to copyright owners through the system. YouTube itself is reportedly also getting a cut in this alleged revenue, making the software a cash cow for the Google-owned subsidiary.

The U.S. Internal Revenue Service and the Department of Justice (DOJ) finally caught up with the pair of alleged fraudsters in November, prosecuting them for 15 counts of fraud, seven counts of money laundering and seven counts of identity theft, as well as one case of conspiracy. The two were ordered to forfeit all assets involved in their offenses should they be convicted of any of the 30 charges against them, including Teran’s property in Phoenix, the contents of their bank accounts (including the savings account under Xpace World Music Corp), a 2017 Tesla X 100D and a 2014 BMW i8.

In a video published on MediaMuv on December 4, after Batista and Teran were arrested, YouTube user Mental Outlaw briefly summarized the alleged scam and the circumstances that made it easier.

“Obviously these guys are scammers for running this scam and stealing money from other content creators on the platform, but also YouTube is also a scam to design a Content ID system that can be so easily manipulated and allow a scam like this to happen. ” Mental Outlaw said.

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