A North Carolina man is facing fraud charges after he allegedly uploaded hundreds of thousands of AI-generated songs to streaming services and used bots to generate billions of plays. Michael Smith is said to have received more than $10 million in royalties since 2017 through the scheme.
Smith, 52, was arrested on Wednesday. According to an indictment (PDF) unsealed the same day, he allegedly used bots to steal royalties from platforms including Spotify, Apple Music and Amazon Music. Smith was charged with wire fraud conspiracy, wire fraud and money laundering conspiracy, each of which carries a maximum sentence of 20 years in prison. The US Attorney’s Office for the Southern District of New York said this is the first criminal case involving the use of bots to artificially inflate music streaming numbers.
Prosecutors accused Smith of creating thousands of bots to stream songs. Initially, he allegedly uploaded his own music to streaming services, but realized his catalog wasn’t large enough to generate significant royalties. After other efforts failed to pan out, he allegedly turned to AI-generated music in 2018.
According to the indictment, Smith began working with two unnamed co-conspirators, the CEO of an AI music company and a music promoter, to use AI to create hundreds of thousands of songs. In exchange for a cut of the revenue, the CEO allegedly provided Smith with thousands of songs each week, and Smith randomly generated song and artist names for the audio files.
Smith is accused of lying to the streaming services by providing false names and account information when setting up the bots, and agreeing to rules that prohibited streaming manipulation. According to the indictment, Smith deceived the streaming services by making the bot accounts appear real, when in fact they were “hard-coded to stream Smith’s music billions of times.” Smith allegedly tried to cover his tracks by using dummy email addresses and VPNs, and instructed his co-conspirators to “avoid detection.”
“Michael Smith fraudulently streamed his artificial intelligence-created songs billions of times in order to steal copyright royalties,” U.S. Attorney Damien Williams said in a statement. “Through this brazen fraudulent scheme, Smith stole millions of dollars in royalties that should have been paid to musicians, songwriters and other rights holders of the songs that were legitimately streamed.”
Smith’s case stands in stark contrast to a musician profiled by The New York Times earlier this year. Matt Farley has written, recorded and uploaded tens of thousands of songs to streaming services about anything people might search for, from celebrities to marriage proposals to songs about poop. Some of the songs last only a few seconds, but the practice appears to be completely legal. He reportedly made about $200,000 from music in 2023.
