AdRev co-founder/president Noah Becker has now exited the company following a $23 million YouTube royalties scam.
Update (August 20th): In our initial coverage, Digital Music News described Becker’s departure as an ‘ouster,’ though we could not independently verify that Becker was removed by AdRev specifically in response to issues involving the MediaMuv scam. Dmitri Vietze, CEO of publicity firm Rock Paper Scissors, Inc., told DMN on Friday that Becker was “already exiting the company for totally unrelated reasons,” but didn’t elaborate further. Vietze noted that he is a former PR representative for both AdRev and Becker; neither AdRev nor its parent company, Downtown Music Holdings, has offered a statement on the matter. DMN updated the title and subtitle of this article accordingly; the following is our original report from August 18th.
Noah Becker, co-founder and president of rights management company AdRev, has stepped down from the company following perhaps the most significant YouTube music royalties scam in history. It is currently unknown whether Becker’s departure from AdRev is related to the fraud.
Initially reported by Billboard, the company MediaMuv allegedly committed fraud in collecting $23 million in royalties for music to which it did not own rights. AdRev acted as MediaMuv’s rights manager and collected many royalties from YouTube before transferring them to the company. According to court documents, the alleged fraud occurred from 2017 to 2021. It involved 50,000 Latin music copyrights, including songs credited to Daddy Yankee, Don Omar, Anuel AA, and Prince Royce, and smaller regional Mexican artists and songwriters.
Industry professionals report that companies like AdRev are typically paid a percentage of the money they collect, usually between 10% and 25%. AdRev would potentially have made more than $2.3 million for its work for MediaMuv. Moreover, emails obtained by Billboard show that Becker was alerted to MediaMuv’s inaccurate royalties claims on multiple occasions but that he shrugs off or rebukes such claims in several of his replies.
“Given the volume of repertoire they (MediaMuv) deal with vs. issues, we feel pretty comfortable,” Becker replies in one such email from March 2018. “Plus, we are just the admin, and there’s already so much negative crap out there about us that’s not true, so we just let this stuff bounce off our backs. But we keep a tight eye on this account and lately have been only increasing in comfort level.”
On November 16, 2021, a federal grand jury in Arizona indicted MediaMuv co-founders Jose Medina Teran and Webster Batista Fernandez for 30 counts of wire fraud, conspiracy, money laundering, and aggravated identity theft. AdRev has not been charged with any wrongdoing for its dealings with MediaMuv, but that may change.
A warrant to seize one of the bank accounts associated with MediaMuv dated January 5 notes that “further investigation into AdRev is underway.” IRS investigators report that the company deposited $285,344 in a MediaMuv-associated bank account two weeks after the indictment, on November 30. The same day, the bank account was emptied. A cashier’s check for $191,449 was made payable to Teran, which he deposited into his new business account at the National Bank of Arizona.
AdRev has told Billboard that it “has fully cooperated with the investigation into this matter conducted by the IRS and the District of Arizona US Attorney’s office as set forth in the indictment. This matter is ongoing — AdRev employees may be called as witnesses at trial or sentencing. As such, AdRev will not be commenting publicly on any facts related to the indictment until the conclusion of the criminal matter.”