updated 11:30 am EDT, Fri March 30, 2012
Music scam ran for over a year
A gang of 11 people of have been imprisoned or given suspended sentences in the UK after being convicted of scamming the Amazon and iTunes music stores out of royalty payments, according to Digital Trends. The scheme involved uploading music to the services and then buying it with stolen and cloned credit cards. To avoid being detected by credit card holders, the gang would never spend more than £10 in a transaction. It nevertheless managed to pull in almost £500,000, costing Amazon and Apple somewhere between £750,000 and £1 million after compensation was paid to the victims of credit card fraud.
The gang downloaded tracks so frequently that one of the artists cracked iTunes' top downloads charts. It was around this point that an investigation was launched, as Apple realized that it was paying royalties to unknown artists from Wolverhampton "at a rate [we] expect to pay someone like Madonna," according to the company. In all about 20 or so tracks were used from artists contacted by the gang's ringleader, such as DJ Denver and ReggiMental.
The group used 24 notebooks for the crime, along with special software to conceal identities. Several different music distributors were used; the sizable haul the group pulled in is being blamed on a loophole which let them pay flat fees to distributors, but pull in royalties themselves.
The gang leader has been sentenced to four years and eight months in prison. One of the musicians, DJ Denver, has been cleared in the matter.