A federal grand jury has indicted Hank Risan, the 70-year-old founder of purported music streaming service BlueBeat, on four counts of wire fraud in connection with alleged misrepresentations to investors totaling approximately $3.17 million.
BlueBeat operated as a consumer music streaming platform that claimed to offer “millions of songs” for streaming, competing with services like Spotify and Apple Music through $5-per-month Basic and $7-per-month Premium subscription tiers.
The platform featured prominent artists including 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 ownership of approximately 2.5 million songs by well-known artists to attract investors to his Santa Cruz-based companies Media Rights Technologies (MRT) and BlueBeat.
According to prosecutors, Risan provided investors with fabricated valuations of BlueBeat and MRT, falsely claimed that a multi-national media and entertainment conglomerate was in the process of acquiring BlueBeat, and made untrue statements about involvement from a former U.S. Department of Commerce undersecretary.
In one November 2020 communication to investors, Risan allegedly wrote that he “received a very favorable comparable regarding the BlueBeat Catalog” and noted “BlueBeat contains approximately 2.5 million songs and $10K per song brings music to my ears.”
The Department of Justice alleges that BlueBeat did not actually own the copyrights to the claimed 2.5 million songs, and that the company valuations were fictional.
Through these alleged misrepresentations about BlueBeat’s music catalog ownership and business prospects, Risan purprtedly induced investors to purchase approximately $1.96 million in stock and stock conversions, while also securing additional payments characterized as loans totaling approximately $3.17 million overall.
Prosecutors allege that Risan used the fraudulently obtained funds for personal expenses including credit card payments, mortgage payments on his residence, and purchasing collectibles.
Risan was arrested and made his initial court appearance in federal court in San Jose before being released on a $100,000 unsecured bond. He is scheduled to appear for a status conference on October 8, 2025 before U.S. District Judge P. Casey Pitts.
According to the DoJ: “If convicted, the defendant faces a maximum sentence of 20 years in prison and a fine of $250,000 for each count 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 assistance from Natachiana Burney and Susan Kreider, following an investigation by the FBI.
Media Rights Technologies has a history of legal disputes in the music industry.
The company reportedly paid a $950,000 settlement to EMI in 2011 after allegedly infringing on several Beatles tracks through soundalike recordings offered for 25 cents each on BlueBeat. MRT has also initiated intellectual property litigation against Microsoft, with one case filed as recently as December 2024 alleging “billions of copyright violations as well as trade secret theft.”
This latest case adds to a growing series of streaming fraud prosecutions targeting individuals who have allegedly defrauded the music industry. Earlier this year, North Carolina musician Michael Smith was indicted for allegedly generating over $10 million in fraudulent streaming royalties using AI-generated songs and bot accounts.Music Business Worldwide
