North Carolina man jailed over AI music streaming fraud scheme
A 54-year-old North Carolina man, Michael Smith, has been sentenced to 18 months in prison for running a sophisticated AI-generated music streaming fraud scheme that netted over $8 million in stolen royalties. Smith, the first American criminally charged with AI-assisted streaming fraud, operated fake accounts on Spotify, Apple Music, Amazon Music and YouTube Music for seven years, using software to continuously stream hundreds of thousands of AI-generated songs he claimed to own. In April 2023 alone, his fraudulent songs received 80.9 million streams: nearly nine times more than Taylor Swift's entire catalogue that same month.
The scheme operated by dispersing billions of automated streams across thousands of AI-generated songs to avoid detection by streaming platforms. Smith created multiple accounts using fake email addresses and fraudulently obtained debit cards, allowing him to generate streams that cut into the shared royalty pools from which legitimate artists are paid. Beyond harming the platforms themselves, the DOJ argued that Smith's fraud reduced royalties across the board for genuine musicians. The court ordered him to forfeit the full $8,091,843.64 he claimed through the scheme, with the DOJ rejecting his legal team's plea for probation instead of imprisonment, citing the need for deterrence and strong punishment against streaming fraud.
- Man jailed 18 months for stealing $8M via AI-generated music streaming fraud
- His fake songs got more streams than Taylor Swift in a single month
- First American criminally charged with AI-assisted streaming fraud
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Michael Smith, a 54-year-old from North Carolina, used artificial intelligence software to create fake songs and stream them repeatedly across major music platforms. Over seven years, he built a sophisticated system to generate billions of automated streams, fraudulently extracting millions in royalty payments that should have gone to legitimate artists.
Smith uploaded his AI-generated songs to Spotify, Apple Music, Amazon Music and YouTube Music using fake accounts created with false identities and fraudulent payment methods. His automated software continuously streamed these songs to accumulate plays at an enormous scale, allowing him to harvest royalties from the shared pools that all musicians draw from when their work is played.
Music streaming services pay out royalties based on the number of times songs are played, creating a system vulnerable to fraud when someone can generate thousands of fake streams at scale. Smith's prosecution is the first of its kind in America for AI-assisted streaming fraud, highlighting a new threat to musicians at a time when streaming income has become vital to many artists' livelihoods.
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Originally published by Ars Technica as “Fraudster jailed for using 10K bots and AI songs to outstream Taylor Swift”.