A federal grand jury has indicted Hank Risan, the 70-year-old founding father of purported music streaming service BlueBeat, on 4 counts of wire fraud in reference to alleged misrepresentations to traders totaling roughly $3.17 million.
BlueBeat operated as a client music streaming platform that claimed to supply “hundreds of thousands of songs” for streaming, competing with companies like Spotify and Apple Music by $5-per-month Fundamental and $7-per-month Premium subscription tiers.
The platform featured distinguished artists together with The Weeknd and Taylor Swift on its artist pages.
The indictment, filed on July 31, 2025 and unsealed on August 7, alleges that Risan made false claims about BlueBeat’s copyright possession of roughly 2.5 million songs by well-known artists to draw traders to his Santa Cruz-based firms Media Rights Applied sciences (MRT) and BlueBeat.
In keeping with prosecutors, Risan supplied traders with fabricated valuations of BlueBeat and MRT, falsely claimed {that a} multi-national media and leisure conglomerate was within the means of buying BlueBeat, and made unfaithful statements about involvement from a former U.S. Division of Commerce undersecretary.
In a single November 2020 communication to traders, Risan allegedly wrote that he “acquired a really favorable comparable concerning the BlueBeat Catalog” and famous “BlueBeat comprises roughly 2.5 million songs and $10K per tune brings music to my ears.”
The Division of Justice alleges that BlueBeat didn’t truly personal the copyrights to the claimed 2.5 million songs, and that the corporate valuations had been fictional.
By way of these alleged misrepresentations about BlueBeat’s music catalog possession and enterprise prospects, Risan purprtedly induced traders to buy roughly $1.96 million in inventory and inventory conversions, whereas additionally securing further funds characterised as loans totaling roughly $3.17 million general.
Prosecutors allege that Risan used the fraudulently obtained funds for private bills together with bank card funds, mortgage funds on his residence, and buying collectibles.
Risan was arrested and made his preliminary court docket look in federal court docket in San Jose earlier than being launched on a $100,000 unsecured bond. He’s scheduled to look for a standing convention on October 8, 2025 earlier than U.S. District Decide P. Casey Pitts.
In keeping with the DoJ: “If convicted, the defendant faces a most sentence of 20 years in jail and a superb of $250,000 for every depend of wire fraud in violation of 18 U.S.C. § 1343.”
Assistant U.S. Attorneys Matthew Chang and Jeff Nedrow are prosecuting the case with help from Natachiana Burney and Susan Kreider, following an investigation by the FBI.
Media Rights Applied sciences has a historical past of authorized disputes within the music business.
The corporate reportedly paid a $950,000 settlement to EMI in 2011 after allegedly infringing on a number of Beatles tracks by soundalike recordings provided for 25 cents every on BlueBeat. MRT has additionally initiated mental property litigation in opposition to Microsoft, with one case filed as lately as December 2024 alleging “billions of copyright violations in addition to commerce secret theft.”
This newest case provides to a rising sequence of streaming fraud prosecutions concentrating on people who’ve allegedly defrauded the music business. Earlier this yr, North Carolina musician Michael Smith was indicted for allegedly producing over $10 million in fraudulent streaming royalties utilizing AI-generated songs and bot accounts.Music Enterprise Worldwide
