Music Label Defrauds Kuzma’s Family of Over UAH 1.5M

Law enforcement officers have announced suspicions against the director of a music label who defrauded the heirs of a famous musician of almost 1.5 million hryvnias. According to media reports, these are the heirs of Andriy Kuzmenko (Kuzma Skryabin).

As law enforcement officials have established, after the artist's death, the copyright to all of his work was inherited by his wife, who founded a company to manage the intellectual property he received. The deceased's wife's company granted a license for any reproduction of all of his songs to a record label that produces famous Ukrainian artists.

"The agreement concluded between them stipulated that 70% of the income from the use of the singer's intellectual property would be received by his wife, and 30% for the management of his assets would be received by the record label. However, the calculation of the remuneration, which was sent to the deceased's wife's company within three years from the moment of concluding the agreement, did not correspond to the real data on the digital music distribution market - the director of the record label deliberately underestimated the number of listening to music tracks on streaming platforms and the amount of remuneration to the copyright holder.

The Cyber ​​Police Department operatives found that in order to increase illegal profits, the record label entered into an agreement with a Czech company that distributes music. The latter assured the owner of the works that the foreign company was their subsidiary and did not take any interest from the profits. In reality, the foreign "partners" took up to 85% of the profits, and the real number of listenings on streaming platforms was also underestimated.

According to an independent expert opinion in the field of intellectual property, the digital distribution of the deceased musician's recordings in 2017-2019 should have brought his wife at least one and a half million hryvnias in profit.

The director and founder of the music label were charged by National Police investigators with fraud committed on a large scale (Part 4, Article 190 of the Criminal Code of Ukraine). The suspect faces up to 8 years in prison.

We previously wrote that in the Kyiv region, law enforcement officers reported suspicions to three fraudsters who organized a housing construction company in Brovary, received over UAH 14 million from buyers, and disappeared, the National Police reports.

In addition, the SSU is conducting an investigation into the possible fictitious employment of men of draft age in the Service for the Restoration and Development of Infrastructure in the Lviv Region (formerly the Service for Highways in the Lviv Region).