AI-Generated Music Scam: Man Charged with $10 Million Streaming Royalties Fraud

Alleged fraudster got $10 million in royalties using robots to stream AI-made music

A North Carolina man is facing fraud charges after allegedly uploading hundreds of thousands of AI-generated songs to streaming services and using bots to play them billions of times. Michael Smith is said to have over $10 million in royalties since 2017 via the scheme. Smith, 52, was arrested on Wednesday. An indictment [PDF] that was unsealed the same day accuses him of using the bots to steal royalty payments from platforms including , and . Smith has been charged with wire fraud conspiracy, wire fraud and money laundering conspiracy. Each count carries a maximum sentence of 20 years in prison. The US Attorney's Office for the Southern District of New York this is its first criminal case that concerns the use of bots to artificially inflate music streaming numbers. Prosecutors accused Smith of creating thousands of bots to stream the songs. At first, he was said to have uploaded his own music to the streaming services, but realized that his catalog wasn't big enough to produce a large sum of royalties. After other efforts didn't pan out, he's said to have 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 create hundreds of thousands of songs using AI. In exchange for a cut of revenue, the CEO allegedly provided thousands of tracks per week to Smith, who is said to have randomly generated song titles and artist names for the audio files. Smith is accused of lying to streaming services by providing phony names and other fake account details while setting up the bots, and by agreeing to rules that ban streaming manipulation. According to the indictment, he deceived streaming services by making it seem the bot accounts were legit when in fact they "were hard coded to stream Smith's music billions of times." Smith allegedly attempted to cover his tracks by using dummy email addresses and VPNs, while telling his co-conspirators to be "undetectable." "Michael Smith fraudulently streamed songs created with artificial intelligence billions of times in order to steal royalties," US Attorney Damian Williams said in a statement. "Through his brazen fraud scheme, Smith stole millions in royalties that should have been paid to musicians, songwriters, and other rights holders whose songs were legitimately streamed." The case of Smith is in stark contrast to a musician profiled earlier this year. Matt Farley has written, recorded and uploaded tens of thousands of songs to streaming services about anything and everything people might search for, from celebrities and marriage proposals to many tunes about poop. Some songs are just a few seconds long, but the practice seems to be entirely above board. He's said to have earned around $200,000 from his music in 2023.

Musician charged with $10M streaming royalties fraud using AI and bots

North Carolina musician Michael Smith was indicted for collecting over $10 million in royalty payments from Spotify, Amazon Music, Apple Music, and YouTube Music using AI-generated songs streamed by thousands of bots in a massive streaming fraud scheme. According to court documents, Smith fraudulently inflated music streams on digital platforms between 2017 and 2024 with the assistance of an unnamed music promoter and the Chief Executive Officer of an AI music company. He acquired hundreds of thousands of songs generated through artificial intelligence (AI) from a coconspirator and uploaded them to these streaming platforms. He then used automated bots to stream the AI-generated tracks billions of times. To avoid detection by the streaming platforms' anti-fraud systems, Smith ensured his bots accessed the platforms using virtual private networks (VPNs). On October 4, 2018, he emailed his coconspirators to say, "in order to not raise any issues with the powers that be we need a TON of content with small amounts of Streams." He also said, "We need to get a TON of songs fast to make this work around the anti fraud policies these guys are all using now." At the peak of his operation, Smith allegedly employed over 1,000 bot accounts to artificially boost streams across various platforms. On October 20, 2017, Smith emailed himself a financial breakdown outlining how he operated 52 cloud services accounts, each with 20 bot accounts, totaling 1,040 bots. He also estimated that each account could stream approximately 636 songs per day, resulting in around 661,440 streams daily. With an average royalty rate of half a cent per stream, Smith calculated that the daily earnings would reach $3,307.20, monthly earnings of $99,216, and annual earnings exceeding $1.2 million. By manipulating streaming data, Smith fraudulently collected more than $10 million in royalty payments after his bots streamed hundreds of thousands of AI-generated songs billions of times. In a February 2024 email, he boasted that his songs generated "over 4 billion streams and $12 million in royalties since 2019." "Through his brazen fraud scheme, Smith stole millions in royalties that should have been paid to musicians, songwriters, and other rights holders whose songs were legitimately streamed," said U.S. Attorney Damian Williams. Smith now faces charges of wire fraud, wire fraud conspiracy, and money laundering conspiracy, each carrying a maximum sentence of 20 years in prison.

Feds Charge AI Music Maker for Faking Streams In $10 Million Scheme - Decrypt

A musician from Cornelius, North Carolina has been charged with wire fraud conspiracy, wire fraud, and money laundering conspiracy in connection to a years-long scheme to manipulate music streaming platforms and pocket over $10 million in royalties with AI-generated songs. From 2017 to 2024, Michael Smith, 52, allegedly used AI to generate songs and automated bots to inflate listener numbers across music streaming platforms. While the services used were not disclosed, major players like Spotify, Apple Music, and YouTube Music pay royalties to artists based on how popular they are. The case against Smith was announced Wednesday by the U.S. Attorney's Office for the Southern District of New York. "Michael Smith fraudulently streamed songs created with artificial intelligence billions of times in order to steal royalties," U.S. Attorney Damian Williams said in an official press release. "Through his brazen fraud scheme, Smith stole millions in royalties that should have been paid to musicians, songwriters, and other rights holders whose songs were legitimately streamed." Rates paid are typically a fraction of a penny per listen -- so raising a substantial sum requires a staggering number of streams. Smith's method involved publishing hundreds of thousands of computer-generated tracks. Then, by using thousands of fake accounts and bots, Smith was able to generate around 661,440 streams per day -- translating to approximately $1.2 million in annual royalties, the indictment said. Smith allegedly told his accomplices that the scheme needed to flood the platforms with content. "We need to get a ton of songs fast to make this work around the anti-fraud policies these guys are all using now," he said in an email cited in the complaint. "The defendant eventually turned to artificial intelligence to expand his fraudulent scheme, and in turn, his illicit proceeds," the DOJ argues. "In or about 2018, Smith began working with the chief executive officer of an AI music company and a music promoter to create hundreds of thousands of songs using artificial intelligence that [he] could then fraudulently stream." Smith's co-conspirators knew that such audio generations might not be considered music in its pure form. They called their experiment "instant music," according to emails cited by the DOJ. There is no mention of the AI service used to generate songs, but there are some very advanced music generators that can create good enough music in seconds. Udio and Suno are the two most popular ones, but some open-source experiments like Stable Audio 2 can be trained and fine-tuned based on specific user preferences. This is murky terrain, though. AI music is not entirely banned, and Smith is not being sued for using AI. In fact, AI music is actually allowed on streaming platforms as long as they don't violate any of the policies that apply to human-made songs. There are even platforms that focus entirely on streaming AI music and other types of AI-generated content. However, some artists are already questioning the legality of AI generations, arguing that the training datasets used to develop such advanced models unfairly uses the product of their work without providing any compensation or asking for any permission. The indictment details the absurdity of some of Smith's AI-generated songs, featuring titles like "Zygophyllaceae" and "Zymotechnical," and attributed to fictitious artists such as "Calypso Xored" and "Camel Edible." Despite their nonsensical nature, these tracks logged a flood of streams thanks to Smith's bot network. Even when streaming platforms flagged the suspicious activity, Smith denied wrongdoing. In a communication to one of his distributors, he claimed, "I have done nothing to artificially inflate the streams on my two albums... I have not done a thing to illegally stream my music," according to the indictment. However, in a February 2024 email cited in the indictment, Smith allegedly boasted that his music "has generated at this point over 4 billion streams and $12 million in royalties since 2019." Each of the charges against Smith -- wire fraud conspiracy, wire fraud, and money laundering conspiracy -- carries a maximum sentence of 20 years in prison. "Thanks to the work of the FBI and the career prosecutors of this office, it's time for Smith to face the music," Williams said.

US man raked in millions from AI-generated songs played by bots on streaming platforms - SiliconANGLE

US man raked in millions from AI-generated songs played by bots on streaming platforms Federal prosecutors today charged a North Carolina musician who'd taken in around $10 million in royalties from his AI-generated songs that were streamed by the bots he deployed. 52-year-old Michael Smith, a real musician, had seemingly decided that making a living in the legitimate world of music was a bridge too far. He proceeded to scam platforms such as Spotify, Apple Music, and Amazon Music, ultimately resulting in charges of fraud and money laundering conspiracy. He now faces a possible 20-year prison sentence. Smith created songs using AI - the software he employed is as yet unknown. He then bought email addresses and created an army of bots, which over seven years, listened to his songs billions of times, generating lots of money in royalties. Smith's scheme was elaborate, to say the least. Prosecutors say to avoid detection he would create so many songs that no one track was listened to too many times. His song names and band names mimicked real songs and bands - perhaps indie bands - with titles such as "Zygotic Washstands" and "Zyme Bedewing" and artist names such as "Calvinistic Dust," and "Callous Post." Investigators say Smith had tried to make a living streaming his own music on various platforms but had failed to generate much revenue. In 2018, after a failed enterprise collaborating with other real musicians to stream their music, Smith approached an AI music outfit and together they created a large library of songs. Smith then deployed his bots to listen to them, and it seems, the cash quickly started to flood in. In an email to himself in 2017, Smith calculated his songs were being listened 661,440 times daily across various platforms, potentially earning over $3,000 a day and up to $1.2 million per year. By the middle of 2019, his monthly earnings reached $110,000, revenue that was shared with his co-conspirators. The New York Times said Smith calculated in 2024 that his AI tunes had been streamed around 4 billion times since 2019, providing about $12 million in royalties. "Through his brazen fraud scheme, Smith stole millions in royalties that should have been paid to musicians, songwriters, and other rights holders whose songs were legitimately streamed," said U.S. Attorney Damian Williams. It seems Smith's scheme, as elaborate as it was, did generate some scrutiny within the streaming business. In 2018, he was approached by a distribution company about possible "streaming abuse" to which he reportedly said there was "absolutely no fraud going on whatsoever."

Musician accused of stealing $10m in royalties with bots and AI

The FBI claims the musician created hundreds of thousands of AI-generated songs, which were streamed for years by bots to accumulate millions in revenue. The FBI has arrested a US musician for allegedly conducting an elaborate fraud scheme using AI and bots to steal $10m in royalties. The US agency said Michael Smith used AI software to create hundreds of thousands of AI-generated songs. The court case claims Smith then used automated bots to stream these songs billions of times. The court documents say Smith conducted this scheme between 2017 and 2024. In 2018 he worked with the CEO of an unnamed AI music company and a music promoter to generate the vast number of songs needed to make this scheme work. Based on emails obtained by the FBI, Smith avoided detection by creating thousands of smaller streams, as he was aware that streaming a single song massively would raise suspicion among the streaming platforms. Smith estimated that he could use the massive amount of bot accounts to generate more than 661,000 streams per day on various digital platforms, to yield annual royalties of more than $1.2m. The songs generated by the AI music company were given randomly generated song and artist names before being streamed. By manipulating these streaming figures with bots and tricking streaming platforms, the FBI said Smith was able to steal $10m. The 52 year old is facing charges of wire fraud and money laundering conspiracy, which both carry maximum sentences of 20 years in prison. "Through his brazen fraud scheme, Smith stole millions in royalties that should have been paid to musicians, songwriters, and other rights holders whose songs were legitimately streamed," said US attorney Damian Williams. "Today, thanks to the work of the FBI and the career prosecutors of this office, it's time for Smith to face the music." As shown in this case, AI technology has the ability to generate massive amounts of content quickly. While beneficial for productivity, it can also be used to flood the internet with spam content. Last year, various online magazines said their inboxes had been filled with AI-generated fiction, while hundreds of Amazon e-books listed ChatGPT as an author. Don't miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic's digest of need-to-know sci-tech news.

FBI busts musician's elaborate AI-powered $10M streaming royalty heist

Feds say it's the first US criminal case involving artificially inflated music streaming. On Wednesday, federal prosecutors charged a North Carolina musician with defrauding streaming services of $10 million through an elaborate scheme involving AI, as reported by The New York Times. Michael Smith, 52, allegedly used AI to create hundreds of thousands of fake songs by nonexistent bands, then streamed them using bots to collect royalties from platforms like Spotify, Apple Music, and Amazon Music. Further Reading While the AI-generated element of this story is novel, Smith allegedly broke the law by setting up an elaborate fake listener scheme. The US Attorney for the Southern District of New York, Damian Williams, announced the charges, which include wire fraud and money laundering conspiracy. If convicted, Smith could face up to 20 years in prison for each charge. Smith's scheme, which prosecutors say ran for seven years, involved creating thousands of fake streaming accounts using purchased email addresses. He developed software to play his AI-generated music on repeat from various computers, mimicking individual listeners from different locations. In an industry where success is measured by digital listens, Smith's fabricated catalog reportedly managed to rack up billions of streams. To avoid detection, Smith spread his streaming activity across numerous fake songs, never playing a single track too many times. He also generated unique names for the AI-created artists and songs, trying to blend in with the quirky names of legitimate musical acts. Smith used artist names like "Callous Post" and "Calorie Screams," while their songs included titles such as "Zygotic Washstands" and "Zymotechnical." Initially, Smith uploaded his own original compositions to streaming platforms but found that his small catalog failed to generate significant income. In an attempt to scale up, he briefly collaborated with other musicians, reportedly offering to play their songs for royalties, though these efforts failed. This led Smith to pivot to AI-generated music in 2018 when he partnered with an as-yet-unnamed AI music company CEO and a music promoter to create a large library of computer-generated songs. The district attorney announcement did not specify precisely what method Smith used to generate the songs. Further Reading The scheme was lucrative. In a 2017 email to himself, Smith calculated that he could stream his songs 661,440 times daily, potentially earning $3,307.20 per day and up to $1.2 million annually. And the plan grew significantly over time. By June 2019, Smith was earning about $110,000 monthly, sharing a portion with his co-conspirators. The NYT reports that in an email earlier this year, he boasted of reaching 4 billion streams and $12 million in royalties since 2019. When confronted by a music distribution company about "multiple reports of streaming abuse" in 2018, The New York Times says that Smith acted shocked and strongly denied any wrongdoing, insisting there was "absolutely no fraud going on whatsoever."

A musician siphoned $10 million in royalties after using AI to create hundreds of thousands of songs, streaming them billions of times

NEW YORK (AP) -- A North Carolina musician was arrested and charged Wednesday with using artificial intelligence to create hundreds of thousands of songs that he streamed billions of times to collect over $10 million in royalty payments, authorities in New York said. Michael Smith, 52, of Cornelius, North Carolina, was arrested on fraud and conspiracy charges that carry a potential penalty of up to 60 years in prison. U.S. Attorney Damian Williams said in a news release that Smith's fraud cheated musicians and songwriters between 2017 and this year of royalty money that is available for them to claim. He said Smith, a musician with a small catalog of music that he owned, streamed songs created with artificial intelligence billions of times "to steal royalties." A lawyer for Smith did not immediately return an email seeking comment. Christie M. Curtis, who leads New York's FBI office, said Smith "utilized automatic features to repeatedly stream the music to generate unlawful royalties." "The FBI remains dedicated to plucking out those who manipulate advanced technology to receive illicit profits and infringe on the genuine artistic talent of others," she said. An indictment in Manhattan federal court said Smith created thousands of accounts on streaming platforms so that he could stream songs continuously, generating about 661,000 streams per day. It said the avalanche of streams yielded annual royalties of $1.2 million. The royalties were drawn from a pool of royalties that streaming platforms are required to set aside for artists who stream sound recordings that embody musical compositions, the indictment said. According to the indictment, Smith used artificial intelligence to create tens of thousands of songs so that his fake streams would not alert streaming platforms and music distribution companies that a fraud was underway. It said Smith, beginning in 2018, teamed up with the chief executive of an artificial intelligence music company and a music promoter to create the songs. Smith boasted in an email last February that he had generated over four billion streams and $12 million in royalties since 2019, authorities said. The indictment said that when a music distribution company in 2018 suggested that he might be engaged in fraud, he protested, writing: "This is absolutely wrong and crazy! ... There is absolutely no fraud going on whatsoever!"

Musician Accused Of AI-Assisted Fraud To Collect $10 Million In Royalties

NEW YORK (AP) -- A North Carolina musician was arrested and charged Wednesday with using artificial intelligence to create hundreds of thousands of songs that he streamed billions of times to collect over $10 million in royalty payments, authorities in New York said. Michael Smith, 52, of Cornelius, North Carolina, was arrested on fraud and conspiracy charges that carry a potential penalty of up to 60 years in prison. U.S. Attorney Damian Williams said in a news release that Smith's fraud cheated musicians and songwriters between 2017 and this year of royalty money that is available for them to claim. He said Smith, a musician with a small catalog of music that he owned, streamed songs created with artificial intelligence billions of times "to steal royalties." A lawyer for Smith did not immediately return an email seeking comment. Christie M. Curtis, who leads New York's FBI office, said Smith "utilized automatic features to repeatedly stream the music to generate unlawful royalties." "The FBI remains dedicated to plucking out those who manipulate advanced technology to receive illicit profits and infringe on the genuine artistic talent of others," she said. An indictment in Manhattan federal court said Smith created thousands of accounts on streaming platforms so that he could stream songs continuously, generating about 661,000 streams per day. It said the avalanche of streams yielded annual royalties of $1.2 million. The royalties were drawn from a pool of royalties that streaming platforms are required to set aside for artists who stream sound recordings that embody musical compositions, the indictment said. According to the indictment, Smith used artificial intelligence to create tens of thousands of songs so that his fake streams would not alert streaming platforms and music distribution companies that a fraud was underway. It said Smith, beginning in 2018, teamed up with the chief executive of an artificial intelligence music company and a music promoter to create the songs. Smith boasted in an email last February that he had generated over four billion streams and $12 million in royalties since 2019, authorities said. The indictment said that when a music distribution company in 2018 suggested that he might be engaged in fraud, he protested, writing: "This is absolutely wrong and crazy! ... There is absolutely no fraud going on whatsoever!"

Musician charged with using bots to boost streaming revenue

A musician in the US has been accused of using artificial intelligence (AI) tools and thousands of bots to fraudulently stream songs billions of times in order to claim millions of dollars of royalties. Michael Smith, of North Carolina, has been charged with three counts of wire fraud, wire fraud conspiracy and money laundering conspiracy charges. Prosecutors say it is the first criminal case of its kind they have handled. "Through his brazen fraud scheme, Smith stole millions in royalties that should have been paid to musicians, songwriters, and other rights holders whose songs were legitimately streamed," said US attorney Damian Williams. According to an unsealed indictment detailing the charges, the 52-year-old used hundreds of thousands of AI-generated songs to manipulate streams. The tracks were streamed billions of times across multiple platforms by thousands of automated bot accounts to avoid detection. Authorities say Mr Smith claimed more than $10m in royalty payments over the course of the scheme, which spanned several years. Prosecutors said Mr Smith was set to finally "face the music" following their investigation, which also involved the FBI. "The FBI remains dedicated to plucking out those who manipulate advanced technology to receive illicit profits and infringe on the genuine artistic talent of others," said FBI acting assistant director Christie M. Curtis.

Man with AI song catalog 'defrauds' streaming services of $10 million

The DOJ indicted the alleged scammer after his bot army amassed billions of plays over seven years. Musicians have long criticized streaming services for their abysmal revenue sharing programs. In 2021, for example, as much as 97 percent of Spotify's over 6 million listed artists earned less than $1,000. Last year, the company announced a new system offering fractions of a cent per track, all of which is now based on even more stringent rules. But there was apparently a way to earn some real dividends from those songs -- provided you have access to thousands of bots, hundreds of thousands of AI-generated songs, and are willing to risk receiving a federal grand jury indictment for wire fraud and money laundering. That's what a man named Michael Smith in North Carolina is currently facing, according to a DOJ announcement on September 4. Unsealed filings from US prosecutors accuse Smith of scamming digital streaming platforms including Spotify, Apple Music, Amazon Music, and YouTube Music of over $10 million in royalty payouts between 2017 and 2024. To accomplish this, however, Smith purchased "hundreds of thousands of songs that were created by artificial intelligence" from an unnamed co-conspirator, uploaded them to the music services, then eventually tasked over 10,000 bot accounts to simultaneously boost streaming numbers for each track around the clock. Both streaming platforms and music distributions companies explicitly prohibit streaming fraud through artificially boosting play and follow counts, content promotion, or the use of automated bots and programs. While the exact amounts vary across platforms and plans, the DOJ notes that it often amounts to "less than one cent per stream." Because of this, it allegedly took Smith's bot army to play the trove of AI songs "billions of times" over nearly 8 years to amass the payout. [Related: Spotify considered axing white noise podcasts to save $38 million.] Although the bots' streaming protocols were largely automated, it reportedly is a "labor-intensive" project to get up and running. The DOJ charges that Smith enlisted help both domestically and abroad to manually sign up bots for streaming services, usually grouped under family plans due to discounted subscription fees and using vast numbers of debit cards through a service typically reserved for issuing corporate cards. Once the revenue started to roll in, Smith allegedly then used an estimated $1.3 million to continue funding the debit cards, thus creating a cyclical system. As far back as 2017, Smith allegedly even emailed himself a financial breakdown illustrating how the whole scheme worked on any given day. For example, 1,040 bots spread over 52 VPN-shielded cloud service accounts streaming around 636 songs per day added up to an estimated 661,440 streams every 24 hours. Estimating that an average royalty was half-a-cent per stream, Smith purportedly tallied the whole enterprise out to $3,307.20 per day, $99,216 per month, and ultimately $1,207,128 per year. Here's where it got even craftier -- any random song racking up a billion streams would likely flag a streaming platform's monitoring systems. But if you spread those streams out across tens of thousands of songs, each garnering only a couple of plays, then you could likely fly under the radar. Hence the alleged need for a mountain of AI-generated tracks with titles like "Zygophyceae," "Zygophyllaceae," "Zygophyllum," and "Zygopteraceae" from non-existent artists such as Calliope Bloom, Calliope Erratum, and Camel Edible. And although 2017-era songs generated by AI apparently weren't the best quality, the landscape looked very different in just a few years' time. "Song quality is 10x-20x better now, and we also have vocal generation capabilities," a third party allegedly wrote to Smith in 2020. "... Have a listen to the attached [song] for an idea of what I'm talking about." "Keep in mind what we're doing musically here... this is not 'music,' it's 'instant music'" another participant reportedly messaged Smith during a separate conversation, along with a winking emoticon. The conspiracy wasn't entirely foolproof, however. Streaming platforms apparently contacted Smith as early as 2018 regarding songs that their systems thought were either artificial and/or receiving playcount boosts. "This is absolutely wrong and crazy!... There is absolutely no fraud going on whatsoever!" Smith allegedly responded at one point via email, adding "How can I appeal this?" Despite these occasional issues, prosecutors say the plan continued until at least February 2024. By then, Smith reportedly told a partner they managed to generate over 4 billion streams raking in $12 million since 2019 alone. "The defendant's alleged scheme played upon the integrity of the music industry by a concerted attempt to circumvent the streaming platforms' policies," FBI Acting Assistant Director Christie M. Curtis said in Wednesday's statement. If convicted, Smith faces a maximum of 20 years in prison per charge of wire fraud conspiracy, wire fraud, and money laundering conspiracy. As for the millions of dollars in payouts, prosecutors maintain "those funds ultimately should have been paid to the Songwriters and Artists whose works were streamed legitimately by real consumers."

The bands and fans were fake. The $10 million was real.

A North Carolina man used artificial intelligence to create hundreds of thousands of fake songs by fake bands, then put them on streaming services where they were enjoyed by an audience of fake listeners, prosecutors said. Penny by penny, he collected a very real $10 million, they said when they charged him with fraud. The man, Michael Smith, 52, was accused in a federal indictment unsealed Wednesday of stealing royalty payments from digital streaming platforms for seven years. Smith, a flesh-and-blood musician, produced AI-generated music and played it billions of times using bots he had programmed, according to the indictment. The supposed artists had names like "Callous Post," "Calorie Screams" and "Calvinistic Dust" and produced tunes like "Zygotic Washstands," "Zymotechnical" and "Zygophyllum" that were top performers on Amazon Music, Apple Music and Spotify, according to the charges. "Smith stole millions in royalties that should have been paid to musicians, songwriters, and other rights holders whose songs were legitimately streamed," Damian Williams, the U.S. attorney for the Southern District of New York, said in a statement Wednesday. Smith was arrested Wednesday and faces charges including wire fraud and money laundering conspiracy. If convicted, he faces a maximum of 20 years in prison for each charge. Smith's lawyer could not immediately be identified Wednesday. Smith could not immediately be reached at a number listed under his name in Cornelius, North Carolina, near Charlotte. His is the first criminal case involving musical streaming manipulation brought by Williams' office. Commercial success in the industry is increasingly measured in digital listens, despite the paltry compensation that streaming companies offer artists, who rely more and more on concert appearances to bring in money. But modern popular music is an overwhelmingly digital affair, with artists using computers to create beeps, bloops and beats -- and to patch over the imperfections of their singing voices. Fans no longer have to possess heavy crates of vinyl or finicky cassette tapes, but receive sound in ephemeral files of ones and zeros. Prosecutors said Smith had cut out the human element almost entirely. His scheme involved a circular process, they said. First, Smith created thousands of fake streaming accounts using email addresses he had purchased online. He had as many as 10,000, even outsourcing the task to paid co-conspirators when creating the accounts became too much work. He then created software to stream his music on loops from different computers, giving the appearance of individual listeners tuning in from different places, prosecutors said. According to a financial breakdown that he emailed himself in 2017 -- the year that prosecutors say he began the scheme -- Smith calculated that he could stream his songs 661,440 times each day. At that rate, he estimated, he could bring in daily royalty payments of $3,307.20 and as much as $1.2 million in a year. To evade detection by streaming platforms, prosecutors said, Smith spread his activity across a huge number of fake songs, never streaming a single composition too many times. Smith had initially uploaded music he wrote himself to the platforms, but after determining that his catalog was too small to produce any real spoils, he tried to increase the number of songs he had access to, prosecutors said. First, he used a catalog belonging to a music publicist, and later he tried to sell his services to other musicians who would pay him to play their music or hand over a chunk of their royalties when he did. Both plans fell short, prosecutors said. In 2018, they said, Smith teamed up with the robots. Joining forces with the CEO of an AI music company and a music promoter, neither of whom was named in the indictment, Smith created a staggering catalog of bogus songs, uploading thousands to streaming platforms each week. "Keep in mind what we're doing musically here," Smith wrote in a 2019 email to the AI executive. "This is not 'music,' it's 'instant music' ;)." The compositions would arrive to Smith with file names like "n_7a2b2d74-1621- 4385-895d-ble4af78d860.mp3." Then, he generated plausible names for the songs and their artists: "Zygopteris," "Zygopteron," "Zygopterous," "Zygosporic" and so on. In a world with real bands called Dirty Projectors, Neutral Milk Hotel and Sunn 0))), real albums like "Yankee Hotel Foxtrot" and real songs like "MMMBop," the titles did not stand out. By June 2019, Smith was earning about $110,000 each month, with a portion going to co-conspirators, the indictment said. In an email in February of this year, Smith bragged that he had reached 4 billion streams and $12 million in royalties since 2019. Smith, prosecutors said, flatly lied to music distribution companies. In October 2018, one company informed Smith that it had received "multiple reports of streaming abuse" and that it planned to remove his songs from all stores. Smith, the charges said, responded with a strongly worded denial: "This is absolutely wrong and crazy!," he said. "There is absolutely no fraud going on whatsoever! How can I appeal this?"

Fraudster charged with $12 million in stolen royalties used 1,000 bots to stream hundreds of thousands of AI tracks billions of times

They say crime doesn't pay. But North Carolina musician Michael Smith allegedly managed to con music streaming services out of $12 million by setting up a 1,000-strong army of bots to stream AI-generated tunes he'd uploaded. At least, he did until the Feds caught up with him and charged Smith with multiple crimes. Smith along with his co-conspirators is said to have operated his dastardly scheme from 2017 until 2024. Aware that simply uploading a track or two and using bots to stream the bejesus out of them would raise red flags with streaming services, Smith hatched a plan to use hundreds of thousands of AI-generated songs. Each track would then only be streamed a relatively small number of times and thus be less likely to attract attention. According to court documents (via Bleeping Computer), Smith laid out his plans in emails. "In order to not raise any issues with the powers that be we need a TON of content with small amounts of Streams," Smith said, adding "we need to get a TON of songs fast to make this work around the anti-fraud policies these guys are all using now." Smith's ruse went so far as to create thousands on fake artist names and hundreds of thousands of fake track titles. As for the "music" involved, that was sourced from a co-conspirator and CEO of an AI music company who provided Smith with hundreds of thousands of AI-generated tracks. So, that's a thousand bots listening to hundreds of thousands of AI tracks billions of times. The streaming mechanics involved over 1,000 bots housed on 52 cloud services, all connecting via VPN services. The net result was the ability to stream over half a million tracks daily. With earnings of half a cent per stream, Smith calculated monthly earnings of roughly $100,000. By February 2024, he was apparently boasting in emails of, "over 4 billion streams and $12 million in royalties since 2019." The specifics of the charges include wire fraud conspiracy, which carries a maximum sentence of 20 years in prison, wire fraud, which carries a maximum sentence of 20 years in prison, and money laundering conspiracy, which carries a maximum sentence of 20 years in prison. The case is being prosecuted by the FBI's Complex Frauds and Cybercrime Unit. Smith was arrested earlier this week and will shortly face a hearing in front of a U.S. Magistrate Judge in North Carolina. it's not clear when any trial proceedings might begin. Anywho, despite the millions in stolen revenues, it all seems like an awful lot of effort, what with all the bots, the cloud services, VPNs, spooling up the track and artist names and so on. Surely all that effort put into something legit would make more sense? It certainly doesn't seem like easy money, especially when it now looks like the result is going to be hard time.

The bands and the fans were fake. The $10 million was real.

A North Carolina man used artificial intelligence to create hundreds of thousands of fake songs by fake bands, then put them on streaming services where they were enjoyed by an audience of fake listeners, prosecutors said. Penny by penny, he collected a very real $10 million, they said when they charged him with fraud. The man, Michael Smith, 52, was accused in a federal indictment unsealed Wednesday of stealing royalty payments from digital streaming platforms for seven years. Smith, a flesh-and-blood musician, produced AI-generated music and played it billions of times using bots he had programmed, according to the indictment. The supposed artists had names like "Callous Post," "Calorie Screams" and "Calvinistic Dust" and produced tunes like "Zygotic Washstands," "Zymotechnical" and "Zygophyllum" that were top performers on Amazon Music, Apple Music and Spotify, according to the charges. "Smith stole millions in royalties that should have been paid to musicians, songwriters, and other rights holders whose songs were legitimately streamed," Damian Williams, the U.S. attorney for the Southern District of New York, said in a statement Wednesday. Smith was arrested Wednesday and faces charges including wire fraud and money laundering conspiracy. If convicted, he faces a maximum of 20 years in prison for each charge. Smith's lawyer could not immediately be identified Wednesday. Smith could not immediately be reached at a number listed under his name in Cornelius, North Carolina, near Charlotte. His is the first criminal case involving musical streaming manipulation brought by Williams' office. Commercial success in the industry is increasingly measured in digital listens, despite the paltry compensation that streaming companies offer artists, who rely more and more on concert appearances to bring in money. But modern popular music is an overwhelmingly digital affair, with artists using computers to create beeps, bloops and beats -- and to patch over the imperfections of their singing voices. Fans no longer have to possess heavy crates of vinyl or finicky cassette tapes, but receive sound in ephemeral files of ones and zeros. Prosecutors said Smith had cut out the human element almost entirely. His scheme involved a circular process, they said. First, Smith created thousands of fake streaming accounts using email addresses he had purchased online. He had as many as 10,000, even outsourcing the task to paid co-conspirators when creating the accounts became too much work. He then created software to stream his music on loops from different computers, giving the appearance of individual listeners tuning in from different places, prosecutors said. According to a financial breakdown that he emailed himself in 2017 -- the year that prosecutors say he began the scheme -- Smith calculated that he could stream his songs 661,440 times each day. At that rate, he estimated, he could bring in daily royalty payments of $3,307.20 and as much as $1.2 million in a year. To evade detection by streaming platforms, prosecutors said, Smith spread his activity across a huge number of fake songs, never streaming a single composition too many times. Smith had initially uploaded music he wrote himself to the platforms, but after determining that his catalog was too small to produce any real spoils, he tried to increase the number of songs he had access to, prosecutors said. First, he used a catalog belonging to a music publicist, and later he tried to sell his services to other musicians who would pay him to play their music or hand over a chunk of their royalties when he did. Both plans fell short, prosecutors said. In 2018, they said, Smith teamed up with the robots. Joining forces with the CEO of an AI music company and a music promoter, neither of whom was named in the indictment, Smith created a staggering catalog of bogus songs, uploading thousands to streaming platforms each week. "Keep in mind what we're doing musically here," Smith wrote in a 2019 email to the AI executive. "This is not 'music,' it's 'instant music' ;)." The compositions would arrive to Smith with file names like "n_7a2b2d74-1621- 4385-895d-ble4af78d860.mp3." Then, he generated plausible names for the songs and their artists: "Zygopteris," "Zygopteron," "Zygopterous," "Zygosporic" and so on. In a world with real bands called Dirty Projectors, Neutral Milk Hotel and Sunn 0))), real albums like "Yankee Hotel Foxtrot" and real songs like "MMMBop," the titles did not stand out. By June 2019, Smith was earning about $110,000 each month, with a portion going to co-conspirators, the indictment said. In an email in February of this year, Smith bragged that he had reached 4 billion streams and $12 million in royalties since 2019. Smith, prosecutors said, flatly lied to music distribution companies. In October 2018, one company informed Smith that it had received "multiple reports of streaming abuse" and that it planned to remove his songs from all stores. Smith, the charges said, responded with a strongly worded denial: "This is absolutely wrong and crazy!," he said. "There is absolutely no fraud going on whatsoever! How can I appeal this?"

How this musician used AI to 'scam' Apple, Amazon and Spotify for $10 million - Times of India

A US musician has reportedly used artificial intelligence (AI) tools to create fake songs, streamed them on services like Spotify, Apple Music and Amazon Music through fake listeners and collected $10 million in royalties. He has now been indicted on federal charges of defrauding the streaming services. How US musician defrauded streaming services According to a report in The New York Times, 52-year old Michael Smith used AI to create hundreds of thousands of fake songs under fictitious band names.He then employed bots to artificially inflate the play counts of these AI-generated tracks, raking in royalties over a seven-year period. The report says that the indictment revealed artist names such as "Callous Post," "Calorie Screams" and "Calvinistic Dust" and song titles like "Zygotic Washstands," "Zymotechnical" and "Zygophyllum" that were top performers on the three streaming services. As many as 10,000 fake profiles were established with the help of co-conspirators. Smith reportedly spread the streams across many songs in a bid to avoid any unusual spikes in listenership. These fabricated creations managed to climb the charts on major streaming platforms, diverting royalties that should have gone to legitimate artists. A US attorney condemned Smith's actions, emphasising the harm caused to genuine musicians and songwriters who were robbed of their rightful earnings. "Smith stole millions in royalties that should have been paid to musicians, songwriters, and other rights holders whose songs were legitimately streamed," the US attorney said. Smith faces charges of wire fraud and money laundering conspiracy, each carrying a maximum penalty of 20 years in prison. He was arrested on Wednesday. The indictment said that Smith was called out by a distribution company that suspected him of fraud in 2018. However, the musician denied doing anything wrong, saying: "This is absolutely wrong and crazy! ... There is absolutely no fraud going on whatsoever!" The TOI Tech Desk is a dedicated team of journalists committed to delivering the latest and most relevant news from the world of technology to readers of The Times of India. TOI Tech Desk's news coverage spans a wide spectrum across gadget launches, gadget reviews, trends, in-depth analysis, exclusive reports and breaking stories that impact technology and the digital universe. Be it how-tos or the latest happenings in AI, cybersecurity, personal gadgets, platforms like WhatsApp, Instagram, Facebook and more; TOI Tech Desk brings the news with accuracy and authenticity.

A musician made $10M streaming AI-written songs with fake accounts, prosecutors say

This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in. Smith, who is 52, made more than $10 million from his scheme, the indictment said. Officials said it was the first prosecution of its kind. The indictment described how Smith was alleged to have fooled the platforms into paying him tiny royalties -- often a fraction of a cent -- each time a bot accessed one of the AI-written songs. It said Smith uploaded hundreds of thousands of songs, which were collectively streamed billions of times by as many as 10,000 fake profiles that he operated with the help of co-conspirators. Prosecutors alleged that Smith spread the streams across many songs in the hope that it would conceal his scheme by avoiding any unusual spikes in listenership. It cited emails from Smith telling co-conspirators that they needed to "get a TON of songs fast to make this work around the anti-fraud policies these guys are all using now." The indictment said Smith worked with a music promoter and the CEO of an AI music company to generate the songs. An email included in the indictment showed the CEO telling Smith "this is not 'music,' it's 'instant music' ;)". The indictment said the AI music company provided Smith with 1,000-10,000 songs a month in exchange for data and at least 15% of his takings. The report said the tracks were given randomly generated file names, song names, and artist names to escape detection. Examples given were "Zygophyceae," "Zygophyllaceae," "Zygophyllum," "Zygopteraceae," "Zygopteris," "Zygopteron," "Zygopterous," and "Zygotic Washstands". Smith was called out by a distribution company who suspected him of fraud as early as 2018, the indictment said. But, it said, he forcefully denied doing anything wrong, writing in response email: "This is absolutely wrong and crazy! ... There is absolutely no fraud going on whatsoever!" Smith's combined charges carry a maximum of 60 years in prison. The DOJ said he would be brought before a judge soon, but didn't give a date.

North Carolina musician arrested, accused of Artificial Intelligence-assisted fraud caper

NEW YORK -- A North Carolina musician was arrested and charged Wednesday with using artificial intelligence to create hundreds of thousands of songs that he streamed billions of times to collect over $10 million in royalty payments, authorities in New York said. Michael Smith, 52, of Cornelius, North Carolina, was arrested on fraud and conspiracy charges that carry a potential penalty of up to 60 years in prison. U.S. Attorney Damian Williams said in a news release that Smith's fraud cheated musicians and songwriters between 2017 and this year of royalty money that is available for them to claim. He said Smith, a musician with a small catalog of music that he owned, streamed songs created with artificial intelligence billions of times "to steal royalties." A lawyer for Smith did not immediately return an email seeking comment. Christie M. Curtis, who leads New York's FBI office, said Smith "utilized automatic features to repeatedly stream the music to generate unlawful royalties." "The FBI remains dedicated to plucking out those who manipulate advanced technology to receive illicit profits and infringe on the genuine artistic talent of others," she said. An indictment in Manhattan federal court said Smith created thousands of accounts on streaming platforms so that he could stream songs continuously, generating about 661,000 streams per day. It said the avalanche of streams yielded annual royalties of $1.2 million. The royalties were drawn from a pool of royalties that streaming platforms are required to set aside for artists who stream sound recordings that embody musical compositions, the indictment said. According to the indictment, Smith used artificial intelligence to create tens of thousands of songs so that his fake streams would not alert streaming platforms and music distribution companies that a fraud was underway. It said Smith, beginning in 2018, teamed up with the chief executive of an artificial intelligence music company and a music promoter to create the songs. Smith boasted in an email last February that he had generated over four billion streams and $12 million in royalties since 2019, authorities said. The indictment said that when a music distribution company in 2018 suggested that he might be engaged in fraud, he protested, writing: "This is absolutely wrong and crazy! ... There is absolutely no fraud going on whatsoever!"

North Carolina musician arrested, accused of Artificial Intelligence-assisted fraud caper

NEW YORK (AP) -- A North Carolina musician was arrested and charged Wednesday with using artificial intelligence to create hundreds of thousands of songs that he streamed billions of times to collect over $10 million in royalty payments, authorities in New York said. Michael Smith, 52, of Cornelius, North Carolina, was arrested on fraud and conspiracy charges that carry a potential penalty of up to 60 years in prison. U.S. Attorney Damian Williams said in a news release that Smith's fraud cheated musicians and songwriters between 2017 and this year of royalty money that is available for them to claim. He said Smith, a musician with a small catalog of music that he owned, streamed songs created with artificial intelligence billions of times "to steal royalties." A lawyer for Smith did not immediately return an email seeking comment. Christie M. Curtis, who leads New York's FBI office, said Smith "utilized automatic features to repeatedly stream the music to generate unlawful royalties." "The FBI remains dedicated to plucking out those who manipulate advanced technology to receive illicit profits and infringe on the genuine artistic talent of others," she said. An indictment in Manhattan federal court said Smith created thousands of accounts on streaming platforms so that he could stream songs continuously, generating about 661,000 streams per day. It said the avalanche of streams yielded annual royalties of $1.2 million. The royalties were drawn from a pool of royalties that streaming platforms are required to set aside for artists who stream sound recordings that embody musical compositions, the indictment said. According to the indictment, Smith used artificial intelligence to create tens of thousands of songs so that his fake streams would not alert streaming platforms and music distribution companies that a fraud was underway. It said Smith, beginning in 2018, teamed up with the chief executive of an artificial intelligence music company and a music promoter to create the songs. Smith boasted in an email last February that he had generated over four billion streams and $12 million in royalties since 2019, authorities said. The indictment said that when a music distribution company in 2018 suggested that he might be engaged in fraud, he protested, writing: "This is absolutely wrong and crazy! ... There is absolutely no fraud going on whatsoever!"

North Carolina musician arrested, accused of Artificial Intelligence-assisted fraud caper

NEW YORK (AP) -- A North Carolina musician was arrested and charged Wednesday with using artificial intelligence to create hundreds of thousands of songs that he streamed billions of times to collect over $10 million in royalty payments, authorities in New York said. Michael Smith, 52, of Cornelius, North Carolina, was arrested on fraud and conspiracy charges that carry a potential penalty of up to 60 years in prison. U.S. Attorney Damian Williams said in a news release that Smith's fraud cheated musicians and songwriters between 2017 and this year of royalty money that is available for them to claim. He said Smith, a musician with a small catalog of music that he owned, streamed songs created with artificial intelligence billions of times "to steal royalties." A lawyer for Smith did not immediately return an email seeking comment. Christie M. Curtis, who leads New York's FBI office, said Smith "utilized automatic features to repeatedly stream the music to generate unlawful royalties." "The FBI remains dedicated to plucking out those who manipulate advanced technology to receive illicit profits and infringe on the genuine artistic talent of others," she said. An indictment in Manhattan federal court said Smith created thousands of accounts on streaming platforms so that he could stream songs continuously, generating about 661,000 streams per day. It said the avalanche of streams yielded annual royalties of $1.2 million. The royalties were drawn from a pool of royalties that streaming platforms are required to set aside for artists who stream sound recordings that embody musical compositions, the indictment said. According to the indictment, Smith used artificial intelligence to create tens of thousands of songs so that his fake streams would not alert streaming platforms and music distribution companies that a fraud was underway. It said Smith, beginning in 2018, teamed up with the chief executive of an artificial intelligence music company and a music promoter to create the songs. Smith boasted in an email last February that he had generated over four billion streams and $12 million in royalties since 2019, authorities said. The indictment said that when a music distribution company in 2018 suggested that he might be engaged in fraud, he protested, writing: "This is absolutely wrong and crazy! ... There is absolutely no fraud going on whatsoever!"

North Carolina musician arrested, accused of Artificial Intelligence-assisted fraud caper

NEW YORK (AP) -- A North Carolina musician was arrested and charged Wednesday with using artificial intelligence to create hundreds of thousands of songs that he streamed billions of times to collect over $10 million in royalty payments, authorities in New York said. Michael Smith, 52, of Cornelius, North Carolina, was arrested on fraud and conspiracy charges that carry a potential penalty of up to 60 years in prison. U.S. Attorney Damian Williams said in a news release that Smith's fraud cheated musicians and songwriters between 2017 and this year of royalty money that is available for them to claim. He said Smith, a musician with a small catalog of music that he owned, streamed songs created with artificial intelligence billions of times "to steal royalties." A lawyer for Smith did not immediately return an email seeking comment. Christie M. Curtis, who leads New York's FBI office, said Smith "utilized automatic features to repeatedly stream the music to generate unlawful royalties." "The FBI remains dedicated to plucking out those who manipulate advanced technology to receive illicit profits and infringe on the genuine artistic talent of others," she said. An indictment in Manhattan federal court said Smith created thousands of accounts on streaming platforms so that he could stream songs continuously, generating about 661,000 streams per day. It said the avalanche of streams yielded annual royalties of $1.2 million. The royalties were drawn from a pool of royalties that streaming platforms are required to set aside for artists who stream sound recordings that embody musical compositions, the indictment said. According to the indictment, Smith used artificial intelligence to create tens of thousands of songs so that his fake streams would not alert streaming platforms and music distribution companies that a fraud was underway. It said Smith, beginning in 2018, teamed up with the chief executive of an artificial intelligence music company and a music promoter to create the songs. Smith boasted in an email last February that he had generated over four billion streams and $12 million in royalties since 2019, authorities said. The indictment said that when a music distribution company in 2018 suggested that he might be engaged in fraud, he protested, writing: "This is absolutely wrong and crazy! ... There is absolutely no fraud going on whatsoever!"

North Carolina Musician Arrested, Accused of Artificial Intelligence-Assisted Fraud Caper

NEW YORK (AP) -- A North Carolina musician was arrested and charged Wednesday with using artificial intelligence to create hundreds of thousands of songs that he streamed billions of times to collect over $10 million in royalty payments, authorities in New York said. Michael Smith, 52, of Cornelius, North Carolina, was arrested on fraud and conspiracy charges that carry a potential penalty of up to 60 years in prison. U.S. Attorney Damian Williams said in a news release that Smith's fraud cheated musicians and songwriters between 2017 and this year of royalty money that is available for them to claim. He said Smith, a musician with a small catalog of music that he owned, streamed songs created with artificial intelligence billions of times "to steal royalties." A lawyer for Smith did not immediately return an email seeking comment. Christie M. Curtis, who leads New York's FBI office, said Smith "utilized automatic features to repeatedly stream the music to generate unlawful royalties." "The FBI remains dedicated to plucking out those who manipulate advanced technology to receive illicit profits and infringe on the genuine artistic talent of others," she said. An indictment in Manhattan federal court said Smith created thousands of accounts on streaming platforms so that he could stream songs continuously, generating about 661,000 streams per day. It said the avalanche of streams yielded annual royalties of $1.2 million. The royalties were drawn from a pool of royalties that streaming platforms are required to set aside for artists who stream sound recordings that embody musical compositions, the indictment said. According to the indictment, Smith used artificial intelligence to create tens of thousands of songs so that his fake streams would not alert streaming platforms and music distribution companies that a fraud was underway. It said Smith, beginning in 2018, teamed up with the chief executive of an artificial intelligence music company and a music promoter to create the songs. Smith boasted in an email last February that he had generated over four billion streams and $12 million in royalties since 2019, authorities said. The indictment said that when a music distribution company in 2018 suggested that he might be engaged in fraud, he protested, writing: "This is absolutely wrong and crazy! ... There is absolutely no fraud going on whatsoever!" Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AI tools, fake songs, and $10M fraud: US musician indicted for royalty scam

A musician from the United States allegedly exploited artificial intelligence (AI) tools to generate fake songs and stream them on platforms like Spotify, Apple Music, and Amazon Music. The musician and his accomplices amassed $10 million in royalties by inflating listens through the use of bots. He has now been indicted on federal fraud charges, according to a report by The New York Times (NYT).

AI Beats the System: Producer Allegedly Pockets $10 Million in Fake Royalties

According to court papers, 52-year-old music producer Michael Smith adopted AI to make hundreds of thousands of songs and automated streaming processes. The move was all to bypass fraud-detecting systems on Spotify, Amazon Music, and Apple Music. He allegedly used that to create several thousand bot accounts streaming his songs, which the AI-generated. According to the indictment, his automated accounts also reaped up to 661,440 streams daily, making him collect significant royalties from the streaming platforms. While Smith originally allegedly ripped off the music he owned, when the services became more sophisticated in filtering out abnormal behavior billions of streams for one song-he moved to creating hundreds of AI-generated albums. The indictment also revealed that beginning in 2018, Smith had teamed up with an AI music company, collaborating with a music promoter to produce several thousand songs. In one of the efforts to make the whole operation appear legitimate, Smith reportedly purchased substantial amounts of email addresses and subscribed to a VPN service to conceal his home control over all the fake accounts.