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iTunes and Amazon royalty payments used to steal £500,000 by British gang

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Members of a gang who defrauded over £500,000 in royalty payments in 2009 and 2010 from Apple and Amazon have been jailed today, with the details of how they extracted the money just coming to light.

Big Ben_1020
Big Ben_1020

Members of a British gang who generated more than £500,000 (almost $800,000) in fraudulent royalties in 2009 and 2010 by buying music on Amazon and iTunes using stolen credit cards have been jailed. Apple was alerted to the issue when it realized that it was paying huge sums to completely unknown artists in Wolverhampton, England, at a rate that it expects to pay "someone like Madonna." The scam worked by uploading music to the services and then using stolen credit card details to purchase the music, avoiding detection by exploiting a system that allows royalty payments to be paid directly from the distributor. iTunes and Amazon are reported to have lost between £750,000 and £1 million (around $1.2 million to $1.6 million) in refunding the thefts to customers.

The scam is believed to be the first of its kind in the UK, with the ringleader of the gang Craig Anderson sentenced to four years and eight months in jail. The musicians who provided the material to iTunes received mixed sentences, with the judge describing one as being "flattered and then taken advantage of."