Music Download Lawsuit - John Deep v. RIAA, Boies, et al.

G. The Labels and Studios Scheme to Defraud Artists of Royalties Owed

132. The Labels and Studios then conceal their phantom ‘credits,’ bid-rigging and kick-backs in inflated expense accounts - called “recoupment expenses” – such as “promotional expenses” and “cost of goods sold.”

133. As a result, the Labels’ and Studios’ scheme typically prevents most artists from ever collecting royalties. Instead, whenever an artist’s royalties approach “break-even” against “recoupment expense,” the Labels and Studios conspire with Trans World to create more phantom “credits,” bid-rigging and kick-backs. Moreover, Labels and Studios coerce artists to sign excessively long-term contracts, and then breach those contracts while concealing their scheme with Trans World by refusing to provide internal audit controls.