Michael Smith jailed 18 months over AI-generated music streaming fraud

Left · 2Michael Smith, a 54-year-old from North Carolina, has been sentenced to 18 months in prison after pleading guilty to a scheme that used AI-generated songs and automated bots to collect millions of dollars in music streaming royalties. 1 2 Left · 2The case was heard in a New York federal court. Metro, citing Billboard, describes Smith as the first person convicted of streaming fraud in a criminal case. Ars Technica, citing a US Department of Justice (DOJ) press release, says Smith is the first American criminally charged with AI-assisted streaming fraud. 1 2 Left · 1According to the DOJ, from 2017 Smith used fake email accounts and fraudulently obtained debit cards to create thousands of accounts on services including Amazon Music, Apple Music, Spotify and YouTube Music. Software then pushed bots to stream songs that Smith claimed to own, which the DOJ said were AI-generated. 2

Left · 1By Smith's 2024 arrest, the DOJ says, Smith had created hundreds of thousands of AI-generated songs and spread billions of automated streams among them so the bots would not all target the same song at once and raise red flags. The DOJ's example was April 2023, when the fake songs were streamed 80.9 million times, against 9.3 million streams for Taylor Swift's entire catalogue that month. 2 Left · 1Smith was arrested in 2024 on a three-count indictment and pleaded guilty to one count of wire fraud conspiracy, which carries a maximum five-year sentence. Prosecutors say Smith first used bots to boost their own music before switching to mass-producing AI songs. 1 Left · 2Smith must forfeit $8,091,843.64, the amount claimed through the scheme. Metro reports the sum as more than $8 million (£6.04 million) in royalties. 2 1

Left · 2Before sentencing, Smith's lawyers asked for no prison time, arguing that no victim suffered real harm and that the impact on any single artist was insignificant, a "drop in the ocean". Their letter said one man should not be punished for the "ills of an industry", suggested prosecutors were making an example of Smith, and said Smith did not actually pocket $8 million. They added that Smith was "profoundly sorry" and had been offered a $5,000-a-month audio production job, and that jail would delay repayment of the forfeiture. 1 2 Left · 2Prosecutors disagreed. They said Smith used increasingly deceptive tactics, lied to police when confronted, and needed a stronger sentence for deterrence. Metro reports they asked the judge to consider at least three years. Prosecutor Jamie McDonald said Smith "robbed millions in royalty payments from genuine artists and their fans". The DOJ argued that the scheme cut into shared royalty pools and so reduced payments to genuine artists. 2 1 Left · 1The Recording Industry Association of America welcomed the ruling, saying streaming fraud harms creators and deceives fans. 1

Left · 1Metro places the case in a wider context: Spotify has announced it will label AI-generated music, Deezer said about 90,000 AI-generated tracks are uploaded to it daily, Sony Music and Universal Music Group have sued the AI platform Suno, and label executives estimate streaming fraud costs the industry up to $2.2 billion a year. 1