British Gang Jailed for iTunes Scam

Criminals used stolen credit cards to purchase own music

March 30, 2012 8:45 AM ET
Getty Images

Gang members in England used stolen credit cards to purchase their own music on iTunes and Amazon as a scam to earn royalties, the BBC reports. Five gang members from Kent, Derby, Birmingham and Wolverhampton, England have been jailed, with one other sent to a youth offenders institution for the elaborate scheme.

The ringleaders of the scam, Craig Anderson and Edwin Road, purchased 24 identical laptops, obtained thousands of stolen or compromised credit card details and recruited helpers to purchase songs uploaded to the sites to drum up royalties. This exploited a system in which musicians receive royalties directly from the online retailers by paying a flat fee to a distributor. The scam ran between January of 2008 and June of 2009, leading to approximately $1.2 to $1.6 million in losses for Amazon and iTunes. The gang members used music by friends and acquaintances in their plot, resulting in a two-year jail term for a former teacher who pleaded guilty to conspiracy charges.

Photos: Random Notes

The crew was busted when iTunes investigated a spike in royalty payments to unknown artists from Wolverhampton, England at a rate more commonly associated with superstar acts like Madonna.

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