A YouTube scammer has been sentenced to five years for scamming $23 million in royalties. 

Jose Teran, a YouTuber, is believed to have scammed YouTube by claiming to be the copyright owner of more than 50,000 songs. MediaMuv, the company he created, identified unmonetized songs and claimed the royalties from Latino artists. It had collected $23 million in royalties from 2016 until 2021. 

Possibly the biggest fraud in music industry history

The IRS investigated the company in 2019 and gained enough evidence to prosecute Teran in 2021. It was revealed in court hearings that Teran had hired eight employees to search for songs and claim their royalties. They set up multiple bank accounts, fictional names and fake companies to continue their theft. 

Teran and his partner, Webster Batista Fernandez, along with their team, frequently claimed all of the royalties. The affected companies were unable to detect the fraud because they didn’t have access to YouTube’s monitoring system. To make their claims appear legitimate, they partnered with AdRev, a rights management group owned by Downtown Music Holdings, and provided the company with fake artist contracts.

In November 2021, Teran pleaded not guilty, while Batista pleaded guilty to one count of fraud and conspiracy. Teran later pleaded guilty to 30 counts of fraud, money laundering and identity theft. As reported by Billboard, an AdRev spokesperson said that the company “has fully cooperated with the investigation into this matter conducted by the IRS and the District of Arizona U.S. Attorney’s office as set forth in the indictment.”

This scheme is common on YouTube, where a portion of royalties are claimed by fraudulent entities, especially songs that have multiple owners or no publishers. Victims of MediaMuv are often not aware they are being defrauded because they do not have access to YouTube’s copyright management platform. 

Even with the assistance of rights management groups like AdRev, fraud still occurs. This raises concerns about YouTube’s ability to ensure that small artists receive their rightful royalties, especially when millions have been lost to false copyright claims.