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A North Carolina man was sentenced to 18 months in prison after prosecutors said he used AI, or super intelligence, to create music and thousands of robots to fraudulently collect more than $8 million in streaming royalties.
Michael Smith, 54, of Cornelius, North Carolina, pleaded guilty in March to one count of conspiracy to commit wire fraud and was sentenced Oct. 6, according to the U.S. Attorney’s Office for the Southern District of New York.
Prosecutors described the case as the Justice Department’s first criminal prosecution involving AI-assisted music streaming fraud.
From 2017 to 2024, Smith created thousands of fake accounts on streaming platforms, including Amazon Music, Apple Music, Spotify and YouTube Music, prosecutors said.
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Prosecutors described the case as the Justice Department’s first criminal prosecution involving AI-assisted music streaming fraud. (iStock)
He then used automated software to stream the songs he owned, many of which were generated using AI technology, allowing him to collect royalties for streams that did not come from real listeners.
At times, Smith managed up to 10,000 bot accounts simultaneously and broadcast the fraudulent streams across thousands of songs in an attempt to avoid detection by the platforms’ anti-fraud systems, according to prosecutors.
The scale of the operation was particularly dramatic in April 2023.
Smith’s bots generated 80.9 million fraudulent YouTube Music streams through family plans that month, while Taylor Swift’s entire catalog received 9.3 million family streams on the platform, according to prosecutors.
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From 2017 to 2024, Smith created thousands of fake accounts on streaming platforms, including Amazon Music, Apple Music, Spotify and YouTube Music, prosecutors said. (Jaap Arriens/NurPhoto via Getty Images)
The scheme ultimately generated more than $8 million in fraudulent royalty payments, authorities said.
“Michael Smith exploited super intelligence technology to generate fraud,” U.S. Attorney Jamie McDonald said in a statement. “By flooding music streaming platforms with automated bots instead of consumers and fake songs instead of creativity, Smith stole millions of dollars in royalties from real artists and their fans.”
“This office is committed to ensuring the integrity of all markets and protecting the public from those who use super intelligence for fraudulent purposes.”
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In addition to his 18-month prison sentence, Smith was sentenced to two years of supervised release and ordered to forfeit $8,091,843.64. (Dilara Irem Sancar/Anadolu via Getty Images)
In addition to his 18-month prison sentence, Smith was sentenced to two years of supervised release and ordered to forfeit $8,091,843.64.
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Smith’s attorneys could not immediately be reached by FOX Business for comment.
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