A 54-year-old North Carolinian will spend 18 months in prison for a music streaming fraud operation involving the use of artificial intelligence.
Michael Smith is said to have exploited AI tech “to generate a fraud” in which he flooded streaming platforms with “automated bots in the place of consumers” and “fake songs in the place of creativity,” per Jamie McDonald, U.S. Attorney for the Southern District of New York.
Smith pleaded guilty to a count of conspiracy to commit wire fraud back in March. From 2017 to 2024, he’s said to have created “thousands” of fake accounts on streaming platforms, then used those bots to stream songs he owned, allowing him to collect royalties.
Those so-called “songs,” per prosecutors, were “generally created” using AI. All told, hundreds of thousands of AI-generated tracks were used in Smith’s operation, as were as many as 10,000 bot accounts.
Prosecutors determined that Smith was able to bring in over $8 million in fraudulently obtained royalties. As such, his 18-month prison sentence is coupled with a required multimillion-dollar forfeiture, plus two years of supervised release.
In a press release issued Tuesday (Oct. 6), the Justice Department cited Smith’s case as the first instance of a criminally charged, AI-assisted music streaming fraud operation. Smith was initially arrested in 2024.
