A man from North Carolina has been sentenced to 18 months in prison after prosecutors accused him of using AI technology to produce music and utilizing thousands of bots to fraudulently earn over $8 million in streaming royalties.
Michael Smith, 54, from Cornelius, North Carolina, pleaded guilty earlier this year to a charge of conspiracy to commit wire fraud, with sentencing occurring on October 6, as reported by the U.S. Attorney’s Office for the Southern District of New York.
This case, prosecutors noted, marks the Justice Department’s first criminal case involving AI-driven music streaming fraud.
From 2017 to 2024, Smith allegedly set up thousands of fake accounts on streaming platforms including Amazon Music, Apple Music, Spotify, and YouTube Music.
He reportedly used automated software to continuously play songs he owned, many of which were created with AI, in order to generate royalty income from streams that essentially had no real listeners.
At times, Smith managed up to 10,000 bot accounts at once, distributing the fraudulent streams across a vast array of songs to evade the platforms’ fraud detection systems, according to the prosecution.
The scale of his operation became particularly evident in April 2023, when the bots he controlled generated an astonishing 80.9 million fraudulent streams on YouTube Music through family plans, contrasting sharply with Taylor Swift’s entire catalog, which received only 9.3 million family-plan streams that same month.
Authorities stated that his fraudulent activities ultimately amassed more than $8 million in royalty payments.
“Michael Smith exploited advanced technology to orchestrate a fraud,” U.S. Attorney Jamie McDonald commented. “By inundating music streaming services with automated bots instead of real consumers, and substituting genuine creativity with fake music, he deprived millions in royalties from actual artists and their fans.”
McDonald further emphasized their commitment to maintaining market integrity and protecting the public from misuse of advanced technologies.
Besides the 18-month prison term, Smith has been sentenced to two years of supervised release and has been ordered to forfeit the sum of $8,091,843.64.
As of now, attorneys representing Smith have not provided any immediate comments regarding the situation.
