Musician pleads guilty to $8 million streaming royalty fraud scheme using AI-generated songs and bots

Musician admits to $10M streaming royalty fraud using AI bots

North Carolina musician Michael Smith has pleaded guilty to collecting over $10 million in royalty payments through a massive streaming royalty fraud scheme on Spotify, Apple Music, Amazon Music, and YouTube Music. 54-year-old Smith bought hundreds of thousands of songs generated using artificial intelligence (AI) from an accomplice, uploaded them to these streaming platforms, and used automated AI bots to stream the AI-generated tracks billions of times. According to court documents unsealed when he was charged in September 2024, Smith fraudulently inflated listening stats on his songs on these digital platforms between 2017 and 2024 with the help of an unnamed music promoter and the Chief Executive Officer of an AI music company. To avoid detection by anti-fraud systems, Smith also had the bots access the streaming platforms using virtual private networks (VPNs). On October 4, 2018, he emailed his coconspirators to say, "to not raise any issues with the powers that be we need a TON of content with small amounts of Streams," and added that, "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 the operation, Smith was using over 1,000 bot accounts to artificially boost streams. On October 20, 2017, he also emailed himself a financial breakdown outlining how he operated 52 cloud service accounts, each with 20 bot accounts. He estimated that each bot could stream around 636 songs per day, for a total of approximately 661,440 streams per day. With an average royalty rate of half a cent per stream, the daily earnings would reach $3,307.20, the monthly earnings would reach $99,216, and the annual earnings would exceed $1.2 million, according to Smith. "Michael Smith generated thousands of fake songs using artificial intelligence and then streamed those fake songs billions of times. Although the songs and listeners were fake, the millions of dollars Smith stole was real," said U.S. Attorney Jay Clayton on Wednesday. "Millions of dollars in royalties that Smith diverted from real, deserving artists and rights holders. Smith's brazen scheme is over, as he stands convicted of a federal crime for his AI-assisted fraud." Prosecutors said that Smith fraudulently collected over $10 million in royalty payments after having his bots stream hundreds of thousands of AI-generated songs billions of times. In a February 2024 email, confirmed these claims bosting that the songs generated "over 4 billion streams and $12 million in royalties since 2019." Smith has agreed to pay $8,091,843.64 in forfeiture and faces a maximum sentence of 5 years in prison after pleading guilty to one count of conspiracy to commit wire fraud.

Man who used 1,000 bots to stream AI songs pleads guilty in $8 million fraud case

Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. In a nutshell: A man charged with conning music services out of millions by uploading AI-generated music tracks and using an army of over 1,000 bots to repeatedly stream them has pleaded guilty to one count of conspiracy to commit wire fraud. He now faces up to five years in jail and has agreed to pay $8 million in forfeiture. From 2017 to 2024, 52-year-old Michael Smith, from Cornelius, North Carolina, and his co-conspirators ran a large-scale fraud scheme that artificially boosted the stream counts of AI-generated songs across Spotify, Amazon Music, Apple Music, and YouTube, according to court documents. Instead of sending millions of plays to a small group of tracks and risking detection, Smith used a subtler tactic: acquiring hundreds of thousands of AI-made songs from a co-conspirator and spreading the streams across them in smaller amounts. The tracks were uploaded under fake AI-generated artist names, including Calm Baseball, Calm Connected, Calm Knuckles, Calliope Bloom, Calliope Erratum, Callous, and Callous Humane. At its height, the operation allegedly relied on 52 cloud service accounts, each running 20 bot accounts, for a total of 1,040 bots. Smith estimated that every account could stream about 636 songs per day while using VPNs to access the platforms, adding up to 661,440 daily streams. Based on a royalty rate of half a cent per stream, he calculated that the setup could generate $3,307 per day, $99,216 per month, and more than $1.2 million per year. In a February 2024 email, Smith claimed his songs had racked up more than 4 billion streams and earned more than $12 million in royalties since 2019 - a statement says he obtained more than $8 million in royalties. Now, the US Attorney's Office has announced that Smith has pleaded guilty to one count of conspiracy to commit wire fraud. Smith is set to be sentenced on July 29, where he faces a maximum sentence of five years in prison. He has also agreed to forfeit $8,091,843.64. "Michael Smith generated thousands of fake songs using artificial intelligence and then streamed those fake songs billions of times," said US Attorney Jay Clayton. "Although the songs and listeners were fake, the millions of dollars Smith stole was real. Millions of dollars in royalties that Smith diverted from real, deserving artists and rights holders. Smith's brazen scheme is over, as he stands convicted of a federal crime for his AI-assisted fraud." The Guardian notes that the case has put the spotlight on AI-music-generating service Suno, which has 2 million subscribers. According to the US trade publication Billboard, Suno generates 7 million songs a day, which equates to a streamer's entire catalog of music every two weeks.

US man pleads guilty to defrauding music streamers out of millions using AI

Sign up for the Breaking News US email to get newsletter alerts in your inbox A North Carolina man has pleaded guilty to defrauding music streaming platforms and his fellow musicians out of millions in royalties by flooding the services with thousands of AI-generated songs - and using automated "bots" to artificially boost the number of listens into the billions. As part of a deal with federal prosecutors in New York's southern district, 52-year-old Michael Smith pleaded guilty on Friday to conspiracy to commit wire fraud. The case against the Cornelius, North Carolina, resident is one of the first successful prosecutions of AI-related fraud in the music business, which is being hammered by fake music that threatens to swamp streaming services and deprive earnings from legitimately human musicians and copyright holders. "Michael Smith generated thousands of fake songs using artificial intelligence and then streamed those fake songs billions of times," US attorney Jay Clayton said in a statement. "Although the songs and listeners were fake, the millions of dollars Smith stole was real. Millions of dollars in royalties that Smith diverted from real, deserving artists and rights holders. Smith's brazen scheme is over, as he stands convicted of a federal crime for his AI-assisted fraud." Smith was charged in September 2024 with fraudulently obtaining more than $10m in royalty payments by amassing as many as 661,440 streams daily between 2017 and 2024, yielding annual royalties of $1,027,128. Then US attorney Damian Williams said the defendant had stolen "millions in royalties that should have been paid to musicians, songwriters, and other rights holders whose songs were legitimately streamed" and it was "time for Smith to face the music". As one X commentator by the handle of Tuki pointed out after the plea deal was announced, Smith had used "AI make the music AND the audience" and had made $1.2m a year "for music no human ever actually listened to". Musicians and the music industry, the X user added, now has "to fight songs that don't exist being listened to by people who don't exist". Under the terms of his plea agreement, Smith now faces up to five years in prison and the forfeiture of $8,091,843.64 when he is sentenced in July. The case against Smith highlights a growing problem for the music industry that had largely recovered from the Napster music piracy era of the early 2000s only to be faced with an AI-based threat to revenue from music streaming platforms such as Amazon Music, Apple Music, Spotify and YouTube Music. Under their business model, which musicians have long complained results in subsistence earnings except for a few big stars, they are recompensed from a pool of funds proportionate to their streams. But AI-generated music - and AI-related schemes to boost plays - diverts funds from musicians and songwriters whose songs were legitimately streamed by real consumers. The UK government recently abandoned plans to allow AI companies to use copyrighted works without permission, a proposal strongly opposed by thousands of artists, including Elton John, Dua Lipa and Paul McCartney. The issue of generative AI music has placed a spotlight on Suno, a company with 2 million subscribers that allows users to turn out AI-generated music that is disrupting the act of creation. The French streaming service Deezer suggests that 97% of people cannot differentiate between human-generated music and that made by AI - including the now-60,000 fully AI-generated tracks delivered to the service daily. According to the US trade publication Billboard, Suno generates 7m songs a day, which equates to a streamers' entire catalog of music every two weeks. Much of the output is passably similar to existing, human-composed music but like most AI production reads as mass-produced without artistic risk or depth. Suno's chief executive, Paul Sinclair, told Billboard earlier in March that he was conflicted. "Truly, every single day I'm conflicted," he is quoted as saying. "This s-t is complicated ... I want to make sure there's whole future generations of the beauty of art and music and the ability to build careers around it."

Man Pleads Guilty to Making $8 Million by Creating Music With AI and Using Bots to Drive Zillions of Fake Streams

Can't-miss innovations from the bleeding edge of science and tech For quite some time now, human musicians have watched in horror as AI-generated slop has started drowning out their work on streaming platforms. Companies like Spotify have discovered entire networks of bots that were designed to fraudulently boost the listenership of AI-generated music, a bizarre scheme essentially involving bots listening to bot music to capture royalties that could've otherwise been paid out to real human artists. The problem has been around for years -- but prosecutors are finally catching onto the dubious scheme and putting those running the bot farms to justice. In a Department of Justice press release, the Southern District of New York attorney Jay Clayton announced that North Carolina native Michael Smith had plead guilty for creating "hundreds of thousands of songs with AI" and using "automated programs called 'bots' to fraudulently stream his AI-generated songs billions of times." The goal was to "mimic the genuine streaming activity of real consumers," ultimately allowing him to "fraudulently obtain more than $8 million in royalties" across music streaming platforms such as Amazon Music, Apple Music, Spotify, and YouTube Music. Smith pled guilty to one count of conspiracy to commit wire fraud, and is facing a maximum of five years in prison. His sentencing has been scheduled for July 29. Smith has also agreed to forfeit over $8 million he made on the scheme. "Although the songs and listeners were fake, the millions of dollars Smith stole was real," said Clayton in a statement. "Millions of dollars in royalties that Smith diverted from real, deserving artists and rights holders." "Smith's brazen scheme is over, as he stands convicted of a federal crime for his AI-assisted fraud," Clayton added. The news highlights how AI tools aren't just being used to impersonate artist; the tech is being used to generate phony listenership as well, through both armies of bots and unassuming listeners. According to the press release, Smith's payout was actively taking away from a singular "pool of funds" that could've gone out to "musicians and songwriters whose songs were legitimately streamed by real consumers." A Rolling Stone investigation into Smith published earlier this year found that the "suburban dad in his forties who owned a chain of urgent-care facilities," was running 1,040 accounts across streaming platforms, each one streaming around 636 songs each day. According to Smith's own estimates, he was earning roughly $3,300 a day, or over $1.2 milion a year. While some of his songs were created by real musicians who were often not credited, per Rolling Stone, many other songs were fully AI-generated. Smith was arrested at his home outside of North Carolina in September 2024 and initially denied any wrongdoing. Beyond fraudulent schemes involving armies of listening bots, the use of AI on music streaming platforms has become a lightning rod. We've come across entirely AI-generated bands racking up millions of listens on Spotify, Apple Music and YouTube Music. High-profile artists, like Aubrey "Drake" Graham, have found that their voices were being deepfaked for viral tracks that they had nothing to do with as well. Spotify has since attempted to address the issue by coming up with new policies that forbid impersonation and establish common "AI disclosures in music credits." The company also claims to be investing "heavily in detecting, preventing, and removing the royalty impact of artificial streams." While the latest news suggests there's at least some momentum in bringing perpetrators abusing music streaming platforms to justice, it remains unclear whether companies like Spotify have been able to meaningfully address the bot problem. It's a persistent game of cat and mouse that's making it even more difficult for small artists to stand out as their work continues to be drowned out by AI slop.

Man Pleads Guilty to Using AI to Generate $8 Million in Fraudulent Streaming Music Royalties - Decrypt

Prosecutors say fake accounts generated billions of artificial plays on streaming music services. A North Carolina man pleaded guilty Thursday to a federal charge tied to a scheme that used artificial intelligence and automated accounts to collect more than $8 million in music streaming royalties, according to the U.S. Department of Justice. Michael Smith pleaded guilty to conspiracy to commit wire fraud in the Southern District of New York following a yearslong investigation. He agreed to forfeit the royalty payments and faces up to five years in prison. "Michael Smith generated thousands of fake songs using artificial intelligence and then streamed those fake songs billions of times," U.S. Attorney Jay Clayton said in a statement. Sentencing is scheduled for July 29. The case comes as AI-generated music tools have become widely available, allowing users to create songs with vocals, lyrics, and instrumentation from simple prompts. Platforms like Suno, Udio, and Google's Lyria have accelerated production, making it possible to generate large catalogs of tracks at scale. At the same time, the technology has raised questions about copyright, ownership, and how streaming platforms handle AI-generated content. In January, Rolling Stone reported that Smith had spent years pursuing a music career, including charting songs and working with industry collaborators, before investigators tied him to the scheme to manipulate streaming services. Streaming services, including Spotify, Apple Music, Amazon Music, and YouTube Music, distribute royalty payments based on play counts, creating an incentive to inflate streams. When he was first charged in September 2024, federal prosecutors said Smith had created thousands of accounts on streaming platforms to artificially play songs he owned, using software to generate roughly 661,440 streams per day and around $1.2 million in annual royalties. He was released on a $500,000 bond the following month. "To obtain the necessary number of songs for his scheme to succeed, Smith turned to artificial intelligence, which he used to create hundreds of thousands of AI-generated songs for which he could manipulate the streams," prosecutors said. Rather than concentrate on a small number of tracks, Smith spread streams across a large catalog. Prosecutors said the approach was intended to avoid detection systems that flag irregular activity. The catalog included both his own recordings and hundreds of thousands of AI-generated tracks, allowing the operation to scale. "Although the songs and listeners were fake, the millions of dollars Smith stole was real," Clayton said. "Millions of dollars in royalties that Smith diverted from real, deserving artists and rights holders. Smith's brazen scheme is over, as he stands convicted of a federal crime for his AI-assisted fraud." Attorneys for Smith did not immediately respond to requests for comment by Decrypt.

Man pleads guilty to generating songs with AI then having bots stream them 'billions of times' to make over $8 million in royalties

"Although the songs and listeners were fake, the millions of dollars Smith stole was real." Have you ever stumbled onto an extremely popular artist that you've never heard of before, just to wonder if you're so out of touch that a global phenomenon could pass you by? Well, in at least one recent case, there was a 'musician' with billions of streams that basically all came from bots -- and if that wasn't enough, the music itself was AI-generated. The case is discussed in detail in a press release on justice.gov; the skinny is that North Carolina man Michael Smith "generated thousands of fake songs using artificial intelligence and then streamed those fake songs billions of times," according to U.S. attorney for the southern district of New York, Jay Clayton. "Although the songs and listeners were fake, the millions of dollars Smith stole was real." Last Thursday, Clayton announced Smith's guilty plea to one count of conspiracy to commit wire fraud. The scale of Smith's operation is hard to fathom: "hundreds of thousands of AI-generated songs were streamed by his bot accounts billions of times, which allowed him to fraudulently obtain more than $8 million in royalties," said the attorney's office in a press release. Turns out, all those itty-bitty royalty payments add up if you just throw enough bots at the wall. Smith won't be sentenced until July, but the crime carries a maximum sentence of five years in prison. He's also agreed to forfeit more than $8 million of his ill-gotten gains. It's no secret that AI is already responsible for the RAMpocalypse and other tangible ills, but its potential for bizarre crimes and careless distortions of ethics -- like cloning journalists without their consent -- is something that we'll probably be learning about for years to come.

Man Pleads Guilty to Defrauding Streaming Services of $8 Million With AI-Generated Songs

Cody Johnson, Lainey Wilson, and Riley Green Slated for ACM Awards Performances Michael Smith, a 54-year-old North Carolina man whom federal prosecutors accused of defrauding music streaming services with AI-generated songs, pleaded guilty to one count of conspiracy to commit wire fraud on Thursday before U.S. District Judge John G. Koeltl. The charge carries a maximum sentence of five years in prison. Smith agreed to pay $8,091,843.64 in forfeiture. Judge Koeltl will sentence Smith in full this summer. In the plea, Smith admitted to creating hundreds of thousands of songs using AI and, in turn, using thousands of bots to stream the songs billions of times, the way average consumers would, to make an income. By spreading the streams across thousands of accounts, he was able to evade detection by streaming services such as Amazon Music, Apple Music, Spotify, and YouTube Music. Ultimately, Smith acquired more than $8 million in royalties. "Michael Smith generated thousands of fake songs using artificial intelligence and then streamed those fake songs billions of times," Jay Clayton, United States Attorney for the Southern District of New York, said in a statement. "Although the songs and listeners were fake, the millions of dollars Smith stole was real. Millions of dollars in royalties that Smith diverted from real, deserving artists and rights holders. Smith's brazen scheme is over, as he stands convicted of a federal crime for his AI-assisted fraud." (An attorney for Smith, Noell Tin, declined to comment.) A letter from the Department of Justice indicated that in addition to forfeiting his earnings and the maximum prison sentence, he could also be sentenced to three years' supervised release and a maximum fine of $250,000. Sentencing is scheduled for July 29. The DOJ said it would not prosecute Smith further but that it would consider tax violations between 2017 and 2024 should it discover them. A Rolling Stone investigation into Smith revealed he was using 1,040 accounts, which would each stream around 636 of his AI-generated songs a day. That added up to 661,440 streams a day, potentially earning him $3,307.20 a day, $99,216 a month, and over $1.2 million a year. "Smith stole millions in royalties that should have been paid to musicians, songwriters, and other rights holders whose songs were legitimately streamed," U.S. Attorney Damian Williams commented when Smith was indicted.

North Carolina Man to Pay $8 Million After Pleading Guilty In First-Ever Streaming Fraud Case

Jay-Z Plots Pair of Yankee Stadium Shows for 'Reasonable Doubt' and 'The Blueprint' Anniversaries A North Carolina man has agreed to pay over $8 million after pleading guilty in the first-ever criminal music streaming fraud case brought by law enforcement. The feds had first indicted Mike Smith in 2024, alleging that he had used artificial intelligence music generators to help him create mass amounts of songs to be streamed millions of times by bots tied to thousands of accounts Smith had set up. Smith earned millions of dollars from his fraudulent streams, siphoning off royalties from the legitimate artists in the royalty pool. Smith pled guilty to one count of conspiracy to commit wire fraud, the U.S. Attorney's Office for the Southern District of New York said, which carries a maximum sentence of five years in prison. Smith will also return the nearly $8.1 million he'd made. "Smith's brazen scheme is over, as he stands convicted of a federal crime for his AI-assisted fraud," U.S. Attorney Jay Clayton said in a statement Thursday. Streaming fraud has been a rampant issue in the music industry for years, a problem only exacerbated by AI now that fraudsters can quickly generate thousands of songs to flood the zone on streaming services like Spotify and Apple Music. The French music streaming service Deezer previously reported that it's seeing 60,000 AI songs uploaded to its platform every day, further noting that as much as 85 percent of streams on those tracks are fraudulent. As The Hollywood Reporter exclusively reported in February, Apple Music doubled its penalties for those caught engaging in streaming fraud, with the company saying AI's impact on fraud was a factor in the decision.