How Two Men Scammed YouTube 9.6 Billion Nairas YouTube in Music Royalties

Here is a story of two men who went above and beyond to achieve arguably the most prominent YouTube royalties theft ever, surprising the world.

What does it take to make 9.637 billion ($23 million) Naira millions? As ambitious as it may seem, you can hustle your way by claiming that the music other users have uploaded on YouTube belongs to you and collecting the royalties. 

It’s this simple YouTube scam that two Phoenix men used to swindle Latin musicians like Julio Iglesias and Daddy Yankee out of royalties worth millions of dollars. Webster Batista and Jose Medina Teran set up MediaMuv media company and claimed to own the rights to the musicians’ compositions and songs.

In total, the agency claimed to own over 50,000 copyrights from 2017, when the pair began running the scheme that turned out to be one of the biggest – if not the biggest – music royalties scam in history.

How Is Scamming YouTube Even Possible?

The world’s most popular content streaming platform uses an almost entirely automated content moderation system, including copyright infringement prevention. Users upload over 500 hours of content on the platform every minute. 

The monumental amount limits human moderation, hence the need for automation. This is what created massive loopholes in Content ID. 

For Medina and Batista to claim the music copyrights and earn royalties via the Content ID system on YouTube, they had to partner their fraudulent company with AdRev. This third-party entity can access the streaming platform’s Content ID and CMS tools, and artists use them to manage their digital copyrights.

The company faked some documents and submitted the relevant paperwork to AdRev to prove ownership of the music. From here, the royalty management agency enabled it to collect royalties and enabled the duo to access YouTube’s CMS directly and claim copyrights.

The surprising part about this scam isn’t just the fact that it happened – this was foreseeable. It’s that the scam artists went on with their scheme for so long, and it was so lucrative. While the pair behind the historical scam was indicted late last year, this was only after a four-year duration that earned them over $5 million annually.

Batista and Jose Medina Lived Lavish Lifestyles

It wasn’t difficult to spot Medina cruising around West Phoenix in his lime-green Lamborghini Aventador with a leather interior and butterfly doors. One would always find the flashy sports car outside Walmart, restaurants, and nightclubs. Locals considered it a neon reminder of his enormous, abrupt wealth, while some used it as a quasi-tracker for his whereabouts.

Medina’s sudden growth from middle-class comfort to new-level luxury surprised those who knew him as a small-time engineer, producer, and Digitlog proprietor. They thought the same about Webster Batista Fernandez, his Dominican Republic-born business associate. Like his partner, he rose from a local video director and bachata musician to owning a Lamborghini and sporting diamond-encrusted chains.

Understandably, the pair’s newfound flashy lifestyles sparked considerable gossip within Phoenix’s music scene.

Many couldn’t fathom why Batista and Medina suddenly lived large, and most thought they were involved in the drug business, considering Phoenix is among the key drug smuggling points in the region.

Everything didn’t just make sense, which raised many questions. But all the answers came out after the duo’s subsequent arrest.

Batista and Jose Medina’s arrest

The curtain on the duo’s rapid wealth came down in November 2021, after an Internal Revenue Service-led investigation indicted them on 30 counts of conspiracy, money laundering, wire fraud, and aggravated identity theft.

The documents presented at the Arizona federal court indicated that the pair used MediaMuv to siphon off $23 million in publishing and master royalties for music copyrights they didn’t control. Medina and Batista claimed most of these royalties through AdRev, a popular rights management agency.

Batista took a plea deal and admitted guilt to one count of conspiracy and one count of wire fraud. As part of the agreement, he revealed vital details about the scam. Medina, on the other hand, pleaded not guilty.

The plea deal indictments surprised many Latin and global music industry players. For instance, rapper and singer Anuel AA from Porto Rico hadn’t even been aware that he had lost tens of thousands of dollars to MediaMuv until Billboard sought his team out about the incident.

Although YouTube and AdRev weren’t accused of any wrongdoing, it’s worrying that such a high-level scam took place on AdRev’s watch. None of the companies publicly commented on any facts regarding the indictment.

YouTube is a “Hotbed of Piracy”

From the revelations of Batista’s plea agreement, it’s clear that it doesn’t take a criminal mastermind to steal the rightful royalties of music creators.

Multiple industry sources acknowledge that numerous hustlers like MediaMuv work with digital rights management companies. But the scheme by Batista and Medina was particularly barefaced, both from the amount the IRS accuses them of stealing and the execution.

YouTube scammers are known to claim tiny bits of content they believe the owners haven’t claimed and may not be discovered. This is prevalent in music publishing as it has more rights holders, making it difficult to track ownership and royalties.

Most songwriters who don’t work with publishers do not know if their portion of the work is being claimed as it should. But in contrast, MediaMuv often claimed all royalties for publishing or master recordings.

YouTube’s content manager and Content ID tool identifies matching recordings to enable rights holders to monitor their musical copyrights metadata and royalty collection. The systems ensure transparency and can identify and fix the problem. But only select users approved by the platform can access this privacy.

This means that many songwriters, artists, and their teams – particularly those less established – can’t review their copyrights and royalty collection on the video-sharing platform. Most victims of the MediaMuv fraud acknowledge that it’s difficult to know if they were being robbed due to this challenge.  

Maria Schneider, an award-winning musician and independent artists advocate, filed a lawsuit against the giant video-sharing platform alongside an entity called Pirate Monitor in July 2020. They claimed that YouTube’s copyright enforcement leaves ordinary copyrighted works creators behind, forcing them to police their copyrights.

On the other hand, these parties lack “meaningful ability” to achieve this because they can’t access the site’s Content ID.

According to the plaintiffs in the case, this has made YouTube a “hotbed of piracy.” But Pirate Monitor dropped out of this case after the video platform countersued the agency for trying to access Content ID using “deceptive behavior.”

So, What’s The Way Forward?

The scheme’s breadth and size of the heist may be inimitable, but many content creators on YouTube have certainly faced the same situation before. YouTube’s Content ID system is meant to help them, but bad faith actors have weaponized it to earn off content that doesn’t belong to them.

The MediaMuv case perfectly depicts how fraudsters purposefully take advantage of digital copyright standards.

Of course, YouTube understands the power of Content ID and CMS, hence tries to be cautious while granting access to them.

So independent musicians and content creators can’t verify such deceitful copyright claims, nor do they have direct authority over them. Instead, they must leverage a rights management company.

But it seems like criminals are falsifying ownership through fake documents to access these crucial YouTube tools using “trusted” tools.

Clearly, the automated copyright system is highly flawed, and a lot needs to be done to make it safe and sound. YouTube must exercise caution when granting Content ID and CMS access because these systems are powerful. Just imagine how many more scammers still rob royalty earnings off an unknown number of hard-working, talented entertainers.