Two men have been charged with allegedly running a years-long music royalty scam in which they claimed to hold the rights to 50,000 Spanish-language songs, in addition to claiming to have the rights to more than $20 million in payments from YouTube GOOGL.
Prosecutors say Jose Chanel Teran, 36, of Scottsdale, Ariz., and Webster Yenddi Batista, 38, of Doral, Fla., claimed that their company, MediaMuv Inc., controlled the rights to a large back catalog of music.
What does the news mean for your wallet? In 2017 they were accused of contacting a third-party royalty management firm that was identified only by the initials A.R. in court papers. The royalty rights to the songs are falsely claimed. Teran and Batista used forged notes from artists who claimed they had the rights to manage the music, prosecutors said.
A spokeswoman for the U.S. Attorney's office in Arizona, who is prosecuting the case, declined to elaborate beyond what was detailed in public court filings.
Teran and Batista signed contracts with the management firm to monetize the music online, prosecutors said. The management firm then established MediaMuv's credentials with YouTube, giving them copyright claims on the songs on the video platform.
Representatives for YouTube didn't respond immediately to a message seeking comment. Teran and Batista lawyers didn't respond immediately to messages seeking comment.
Over the next several years, prosecutors say that Teran and Batista fraudulently collected more than $20 million in royalty payments from the arrangement, none of which they shared with the artists who wrote the songs.
Prosecutors say that when the legitimate right holder for one song was identified in court papers only by the initials D.H., Teran boldly insisted that he had no legal grounds to stand on.
The men allegedly collected over $100,000 in royalty payments for the hit ballad Me Llamas by the Colombian pop group Piso 21, according to court documents. A song from the 1980s by the long-running Mexican group, Los Caminantes, allegedly netted the couple $30,000 in payments. Representatives for the groups couldn't be reached immediately.
The men collected more than $50,000 in royalty payments from 21 different groups, according to the prosecutors.
According to court documents, Teran used more than $500,000 as a down payment to purchase a mansion in the Sonoran Foothills in the outskirts of Phoenix. The men were accused of using $129,000 to buy 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.
Both men have been charged with 30 counts of conspiracy, wire fraud, money laundering and aggravated identity theft. They could face decades behind bars and large fines if convicted.