YouTube Scammer Pleads Guilty To Making Off With $23 Million In Fraudulently Obtained Royalties
from the broken-systems-are-the-easiest-to-game dept
Content ID isn’t really the villain here. But it’s an accomplice.
YouTube content moderation — including the prevention of copyright infringement — is almost completely automated. It has to be. As of 2019, more than 500 hours of content were uploaded to YouTube every minute. Machines have to do the work because human moderation is no longer possible.
That’s what makes Content ID severely exploitable. And the heavy hand of incumbent content industries ensure the automated process is considered infallible, which has naturally resulted in thousands of bogus copyright claims that adversely affect content creators and their channels.
A system like this is just waiting to be gamed. And it has been by scam artists, unethical content creators, major IP holders ensuring not a single second of content goes unmonetized, and bad faith efforts seeking to silence people.
What’s so surprising about this scam isn’t that it happened. That part was inevitable. It’s that it went on for so long and was so lucrative. The pair behind this multi-million dollar scam was indicted last year, but only after a four-year run that generated more than $5 million a year.
The case – United States of America vs. Webster Batista Fernandez and Jose Teran – reveals a massive Content ID scam that generated more than $20 million for the 36 and 38-year-old from Scottsdale, Arizona, and Doral, Florida.
The basics are straightforward. Starting sometime in 2017 through to at least April 30, 2021, Fernandez and Teran began monetizing music on YouTube for a vast library of more than 50,000 songs, none of which they owned the rights to.
The pair falsely represented to YouTube and an intermediary company identified only by the initials A.R. that they were the owners of the music and were entitled to collect “royalty payments” from their use on YouTube. In some cases the defendants used forged documents claiming to be from artists declaring that the pair had the rights to monetize their music.
It’s not like YouTube hadn’t been notified.
Complaints are not hard to find. Large numbers of YouTube videos uploaded by victims of the scam dating back years litter the platform, while a dedicated Twitter account and a popular hashtag have been complaining about MediaMuv since 2018.
But due to the precarious relationship between YouTube and the many, many rightsholders that have managed to bend it to their will, those making claims on content will most often be given the benefit of a doubt. Those complaining about wrongful claims are ignored, if not removed from the platform altogether.
There’s (sort of) a happy ending here. One of the scammers has plead guilty and will now be watching a lot of their (expensive) possessions be sold off by the government to satisfy (part) of a $25 million judgment — one that will apparently actually funnel the money to content creators who were screwed by this scam.
A man at the center of a copyright scam that abused YouTube’s Content ID system to fraudulently obtain more than $23m to the detriment of artists has entered a plea agreement with the US government. Webster Batista Fernandez wrongfully claimed to own the rights to more than 50,000 tracks and illegally monetized user uploads for years.
According to the plea agreement [PDF], Fernandez and his crew searched YouTube for songs not being monetized, uploaded their own mp3s, sent out copyright claims on the existing uploads, and began raking in the cash. Access to YouTube’s content management system was obtained after Fernandez convinced YouTube he and his company (MediaMuv LLC) had a library of 50,000 songs it wished to monetize. Fake email accounts, fake people, fake music labels… and all this went towards draining actual creators of $5 million in royalties per year.
It was an astoundingly successful scam. But it certainly wasn’t a complicated one. It’s a scam anyone with a handful of email addresses and the willingness to shell out a few bucks to generate official paperwork for a shell LLC can accomplish. And it points to one of the biggest weaknesses in YouTube’s anti-infringement efforts: the platform does not have the necessary amount of time, much less personnel, to sniff out scammers before they walk away with a whole lot of money and/or destroy the livelihoods of legitimate content creators. This is because the system is skewed to believe those flexing IP rights rather than those whose content may have been flagged inadvertently or maliciously. That approach leaves victims out in the cold while rewarding malicious abusers of the system with undeserved profits.
Filed Under: contentid, jose teran, royalties, scams, webster batista fernandez
Companies: google, mediamuv, youtube
Comments on “YouTube Scammer Pleads Guilty To Making Off With $23 Million In Fraudulently Obtained Royalties”
One of the scammers has plead guilty…
*pled
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I always understood that the proper term is “pleaded”.
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In everyday terms, perhaps, but in court it’s ‘pled’.
TBCH, it’s not so much Content ID at fault here as the system that allows monetisation of allegedly infringing videos without human oversight. If anything’s an accomplice in this case, it’s Alphabet. Content ID is merely the tool employed by the copyfraudsters.
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The problem is that the amount of content being produces is more than a human effort at dealing with copyright issues can handle. Copyright is now getting in the way of actual content creators making a living, and that is why it needs to die, and be replaced by protection of attribution.
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As a copyright holder myself, I can’t agree that copyright needs to die. However, I do believe that DRM needs to die, and if I didn’t live in the UK, where copyright can’t be waived, I would be happy enough with the original Berne Convention term of life+50. As it is, I’ve included a clause in my will that if my copyright is infringed in the period of 51-71 years after my death, then the infringement is to be ignored by my estate.
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In which case Contentid and in Europe mandatory filters will make it increasingly difficult for creators to self publish, never mind make a living for themselves,forcing them back into the lottery of trying to find a publisher.
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Because copyright = aggressive enforcement? I don’t think so.
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Do you think corporations will give up aggressive enforcement, as protecting their investment in content created by others is a priority as they see it. You should also note, as most self published have noted, the ability to create is a sellable skill, hence the suggesting that attribution should be protected.
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The right to attribution doesn’t prevent others distributing your works without permission, and it certainly doesn’t prevent large corporations copying my stuff and selling it to make a profit for themselves. You would only have a point if copyright didn’t protect the creations of the little people as well. That’s what makes current copyright law in the US better than the pre-1988 law, despite all claims to the contrary. Only large corporations have enough money to regularly file registrations; everyone else files only if their work is infringed because that’s more affordable.
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True, but where will people go to find more of your work if they like it. Most people realize that giving money to a corporation has less chance of getting more of someones work that going and supporting the actual creator on the likes of Patreon. A corporation can only sell that which has been created, while the actual creator can sell their ability to create new works.
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Actually, most people will go to the vendor that has the money to make the most copies, disincentivizing future creation because big corporation is making all the money every time they create something people like. Are you accidentally obtuse or is it a fashion statement?
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Irrelevant for anything digital, and there are a lot of companies who deal with batch production or production on demand for physical goods. Also, big companies make most of the profit for creative works that they control. Think of the starving artist is a meme created and maintained by the publishers who try to ensure the artists starve.
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I wasn’t invoking the false image of the ‘starving artist’, but thanks for the strawman.
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The number of people who have made a living via a traditional publishing contract are few and far between. Those who have become rich are even fewer. For every J.K Rowling there are a hundred authors who still have a day job.
Re: Re: Re:10
Ah, so you were looking for an excuse to erect that particular strawman. Good to know.
Re: Re: Re:4
Do you think corporations will give up aggressive enforcement…
And since corporations are the only copyright holders that exist in a world where automatic copyright is a thing… Excellent proof by assertion, though, bonehead.
Re: Re: Re: The advantage of posthumous copyright incentives ...
is that no one’s going to ever write a nasty review. The US Constitution’s a very succinct statement of the reasons for copyright protection:
“To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries”
which obviously applies to decomposers decomposing and already decomposed.
But face it, the benefits of widespread copyright welfare fraud are so obvious, mostly to the talentless drones who live off the creativity of others …
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I don’t think Autie was saying that every claim should be looked at by a human, just the ones where the alleged rights holder opts for monetization because that’s the system the fraudsters enriched themselves by.
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That makes little difference, as monetization is a common way of dealing with snippets, where a snippet results in all income from the video going to the claimants.
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…monetization is a common way of dealing with snippets, where a snippet results in all income from the video going to the claimants.
Hence my suggestion of human oversight. Why should fraudsters get to enrich themselves at the expense of YouTubers and rights holders alike?
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Hence my reminder that the volume of claims is such that human checking of all claims is not possible. At a claim rate of 1% that is now at least 8000 hours under claim per day, which equates to 30 to 40 thousand claims a day at least. Also there is no central database via which claims my be checked, so unless there is an obvious problem with the claim, and given the legal risks, YouTube has to accept the claim as valid, and throwing people at the problem does not change that.
The big problem with copyright is that it is one persons word against another person when it comes to claims and counterclaims.
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…human checking of all claims is not possible.
Again, I didn’t say all claims, only those where the claimant opts for monetisation. Now please quit belabouring the same extreme point. The corpse of the equine has had enough of being lashed.
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“Again, I didn’t say all claims, only those where the claimant opts for monetisation”
Which is presumably still at least hundreds of thousands of claims a day. Remember, most of these claims are automated – that’s why the response has to be for so many of them.
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Then to make it easier, allow for monetisation only on videos that are being monetised by the uploaders, and if that’s still too many, a temporary block until the facts of the case (fair dealing/use, claimant not who they say they are) are known.
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“a temporary block until the facts of the case (fair dealing/use”
Block on what? The video? That has a lot of problems you might not be accounting for. Chiefly among them that like more media, a lot of attention and thus monetisation comes when the video is new. Blocking the video for a couple of months until the content is completely out of date and nobody’s interested any longer is hardly a solution, and would kill most smaller professional creators even if they’re always found to be innocent.
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Just hold the money in escrow until the dispute is settled. Of course, that doesn’t solve the problem on how content creators almost always are on the loosing side of any dispute.
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The law, and publisher propaganda push the viewpoint that publisher are the only true copyright holders, and individual copyright only exists so that it can be sold to a publisher. The reason for copyright laws is always pitched as protecting corporations from the ravages of private individuals.
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That’s true in a small number of cases. In the majority, it takes rights holders years to become aqare of the video. Your point?
Re: Re: Re:5
If somebody claims copyright, how does YouTube validate that claim? If somebody puts in a counter claim, how does YouTube decide who is the actual copyright owner?
Even when limited to monetization claims, there are 10s of thousands of claims a day to deal with, and a claim is no more than that bit of music belong to us, give us the money from the whole video. About the only information YouTube has that a claim is being made against a video, and you expect them to decide who actually owns the content. Bringing a person into the loop does not help, unless they have the time, which may be several hours spread over days, to research the claim and request information from the parties involved.
It does not help that the law, and propaganda from publishers makes it look like that the corporations are the victims of piracy, and would never abuse the powers of copyright to rob individuals. Just look at how many news stories are written as if only publishers can own copyrights, and that that individuals are out to rip them off. Note how the European copyright directive strongly protects publisher interests, and makes vague promises about protecting an individuals rights.
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If somebody puts in a counter claim, how does YouTube decide who is the actual copyright owner?
Oh, I don’t know. How long does it take to match the email address of the claimant to the email address on the website of the agency they claim to represent? I believe that YouTube’s parent company even has a tool for that job.
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They don’t really validate it at all, they just flag the video and pass the claim on to the account holder.
They really don’t (well, unless it blows up in media). The claimant can just deny a counter claim and the account owner may get a copyright strike and if they get 3 strikes their account is deleted – which is why creators on YT are extremely wary of filing counter claims.
There are of course caveats to this depending on who the claimant is, who the account holder is and what type of claim being lodged. Most copyright holders don’t claim infringement since that deprives them of any possible income from monetization, instead they just claim they own the copyright which means they get the money.
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Why? A lot of software and other (eg. Creative Commons) licenses make a big deal about attribution, and it seems weird to me because I don’t see any significant controversy about it. As if the terms are a relic of a crisis that never happened.
If anything, it’s the authors of copyright law (Disney) who are most opposed to giving credit (Kimba the White Lion). Otherwise, who actually wants to omit attribution but provides it due to legal requirements?
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This is basically what Tim wrote, and I don’t see how it can be true. Creating a video is more time-consuming than watching one, and yet much more time overall goes into watching videos. E.g., I could spend 30 hours making a one-hour video, and if 2000 people watch it, they’ve put in 65 times what I did.
“Youtube copyright policing”, if this industry existed, would presumably not take longer than video creation overall (maybe 10%-20% of video-watching time). The main difference is that nobody would want to do it for free, while most videos are made and watched for free. It would be totally absurd to create such an industry, and potentially wildly unprofitable, but saying it’s impossible seems akin to someone predicting in the year 2000 that it would be impossible for humanity to ever produce 500 hours of video every minute.
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That is not the problem, but rather knowing or comparing that video with all works under copyright, which is not just those on YouTube, but all Videos published online, along with all published music etc. While viewing the Videos is a problem, that is that is YouTube is gaining more than 30,000 hours an hour, which when you add in human resources, tech support and management, that is a lot of bodies just to look at all videos, and that is not enough to know all other videos and music etc, just to examine one for infringement.
The only way of even attempting to check all videos for any infringement is by filter systems like Contentid, and such systems cannot deal with licensed use and fair use.
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It’s impossible for the simple reason that if you put the effort in to check every video you also kill the service.
But if go with the absurd definition of impossible where you spend reality-bending amounts of resources to tackle a problem, then nothing is really impossible that doesn’t explicitly break the laws of physics.
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So “every video where the alleged rights holder opts for monetization” becomes “every video on YouTube.” An excellent fallacy of composition on your part. (-_Q)
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So, do you always disingenuously paraphrase what people say or write in an effort to score some kind of imagined rhetorical “win”?
And while you are pondering that question, may I enlighten you to the fact that the context was that humans would check every video for copyrighted material, not claim every video.
Now take your broken strawman somewhere else please.
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“Every video” is “every video on Youtube” by implication. I don’t see what’s so disingenuous about that interpretation of the original phrase.
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It kills the free service. I don’t know that it would entirely kill Youtube to force users to cover the costs of copyright screening. It probably would, if there were a competitor without this policy; but if governments follow through on their threats to (more or less) require such things, there might be no such competitor.
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30,000 hours of video uploaded every hour means you need to hire about 120,000 people (3 shifts and a rotating schedule for free days) who need to go through the videos in a timely manner. The monthly costs just for the salaries would be upwards of 500 million USD excluding the cost of for any new infrastructure, services, insurance, support personnel (HR etc) and furnished offices.
If YT become a paid service for creators to cover the cost, it will have several effects like creators who rely on ad-revenue from YT wont use YT which means less new videos which means less ad’s being shown which means less revenue for YT which means they have to downsize to fit their revenue which will make the stock market go bananas which will devalue YT’s stocks which will piss off the share holders to no end.
If it doesn’t become a paid service, the chain of effects will be almost the same but with the same end result.
Could one argue that it’s possible, certainly, but when all the solutions that aren’t absurdly impractical doesn’t work economically it is practically impossible.
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You missed the bigger problem of copyright screening, and that is how do you check a video against all existing videos that are under copyright. That is not just videos on YouTube, but all the other video sharing sites, Hollywood owned videos and films all the content produced by the TV studios. Looking at the video is the smaller part of the problem, comparing with all existing videos is a nearly impossible task.
Note pre-Internet all published books, records and films could be listed in a yearbooks, because the publishers, labels and studios were and are very selective about what they publish. Post Internet, a minutes worth of publishing would fill several books, is anybody was mad enough to attempt to keep the records. Even the mighty Google does not have a complete index of all published works on the Internet.
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You don’t necessarily have to. If you only check videos with 10-100 views, against the most famous videos from the most litigious people, you’d avoid most of the liability. Maybe enlist every 10th viewer to perform that check, perhaps in the guise of “tagging” source material. If one wants to call this user-hostile, or impractical or financially infeasible, I have no objection. Just not impossible. (If Rocky’s numbers are correct, BTW, that’s about 30% of Youtube’s revenue for the salaries, maybe 50% “all-in”. Likely more than their current profits.)
Keep in mind that uploaders give YouTube a license to the videos they’re uploading (and if derivative works aren’t currently included in that license, YouTube could change their agreement to eliminate all liability for them). Therefore, there’s no legal necessity to check whether one YouTube video infringes on the copyright of another.
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Wrong, the uploader only licenses YouTube to display the video to is users. The copyright to the video remains with the uploader. Indeed one of the complaints that YouTube creators have of YouTube is that ContentID is not available to them, and their videos can be monetized on other channels without attribution.
What you are proposing is that only the copyrights bought out by corporate publishers matter, and you leave the individual in a wprld where there is no copyright, which is more or less how the current system works. As a result the corporations can claim fair use when they use clips from a self publishers works, while denying the same rights for the self publishers to use the works purchased by the corporation.
Lets level the playing field, and eliminate copyright.
I wonder if A.R. is AdRev. AdRev have a song of mine in their catalog and never paid me for it.
Why do you think the actual creators will get any of the money?
The MPAA probably has already made claims for all of it.
Something something no one would EVER abuse these systems, and we are SHOCKED just SHOCKED that the system has been abused yet again after the last 10 times it happened.
One does wonder how many others are running this scam right now enabled by the cartels demanding the system be easier for their members to access. If you keep the numbers low you can make a very nice living.
Of course since no one would ever do this, they never took the complaints seriously, that minimal investigation would have revealed something was wrong before the numbers were in the multimillion levels. (blinks slowly having a deja-vu moment)
news at 11
This sort of thing’s a constant source of complaint on various creatives’ web forums I’ve visited over the years. A guitarist plays some Public Domain tune from Aguado or Sor or the like, and some louse comes along, claims copyright and gets it removed or all donations forwarded to him.
One of the most basic principles of any organization that wishes to survive for any great length of time is, don’t bring yourself into disrepute. And likewise, for any law, the same applies. Which does not appear to have been taken into consideration here.
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By and large, pro-copyright organizations have learned that they could get away with it. The RIAA realized that they could get away with harassing the innocent for prostitute money and judges more or less gave them a shrug and “Carry on”. It’s no wonder Prenda Law thought they could likewise pull off the same technique, and got as far as they did.
dependance
An automated system depending on an automated system of another automated system, and Then A type of verification by a Human?
But no one can know Every bit of Music and HOW the System works for recordings. 1 version of Brahms, is like another.
Still would be nice to have an AGENCY that had all this information as well as WHO own what. The Stuff has been bought back and forth so many times, its hard to tell the current standings.
Should pay for itself in about 2 days of work..
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Still would be nice to have an AGENCY that had all this information as well as WHO own what.
YouTube alone would be adding several thousand records a minute. Through in TikTok, and all the other video sharing sites, photo sharing sites, and articles on blog and news sites, and you need Google sized data capabilities to even attempt keep track of things.
Remember in while you watch a 15 minute YouTube video, at least another 7,500 hours of video have been uploaded to YouTube, equivalent to 30,000 15 minute videos. Design a system that can deal with that volume, and detect when the same video is added by several different people, with days or weeks between the two ownership claims being added.
I have come to the conclusion that copyright needs to die, because no copyright system can deal with the actual human creative output. It only worked pre-Internet because the majority of human created works were rejected by publisher, mainly because they did not even look at them, and most of those works disappeared from the record when a creator gave up trying to get them published and destroyed them, or they were destroyed when the person effects were being disposed of.
It should also be noted that fans are funding such activity, and even explicitly anti-MAFIAA musicians, filmmakers, actors, etc. (publically saying “copy my stuff” or “those guys are assholes”) have signed up with MAFIAA companies. It’s not just the courts letting them get away with it. Whatever individuals are boycotting these companies are not collectively significant, and I’m not aware of any famous person “in the business” refusing to work with them (and sticking to that). Even the so-called “independents” are not actually independent of them.