Hank Risan, a 70-year-old CEO of Media Rights Technologies Inc., was arrested on charges of wire fraud involving misrepresentations related to his music streaming service BlueBeat. The federal indictment alleges that Risan misled investors by falsely claiming copyright ownership of 2.5 million songs and the imminent acquisition of BlueBeat by a major entertainment company. He reportedly convinced investors to buy around $1.9 million in stock based on misleading valuations and false statements, including claims about partnerships with high-profile individuals. The FBI investigation led to his indictment being unsealed on July 31.
Prosecutors countered, "In reality, the indictment alleges, BlueBeat did not own the copyrights to the 2.5 million songs, the valuations of MRT and BlueBeat were fictional, the advertised multi-media conglomerate was not in the process of acquiring BlueBeat or its catalog, and the former Commerce official was not involved with BlueBeat."
Prosecutors wrote that Risan told investors in 2020 that he "received a very favorable comparable regarding the BlueBeat Catalog," adding that, "To put that news in perspective, BlueBeat contains approximately 2.5 million songs and $10K per song brings music to my ears. You can do the math!"
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