Michael Smith, AI-Fueled Streaming Scam, New York NY, 2023

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NEW YORK, NY – A North Carolina man is facing federal time after admitting he flooded music streaming services with fake songs generated by artificial intelligence, then used bots to rack up billions of fraudulent streams, diverting millions in royalty payments from real artists.

Michael Smith, pleaded guilty today to conspiracy to commit wire fraud before U.S. District Judge John G. Koeltl. The feds say Smith built a digital empire of ghost tracks – songs churned out by AI – and then used automated programs to make it *look* like millions of people were actually listening.

According to court filings, Smith created hundreds of thousands of these bogus songs and used “bot accounts” to generate billions of streams across platforms like Spotify, Apple Music, Amazon Music and YouTube Music. Each stream triggers a tiny royalty payment, and those payments add up. Smith’s scheme wasn’t about the music; it was about skimming money that rightfully belonged to legitimate musicians and songwriters.

“Although the songs and listeners were fake, the millions of dollars Smith stole was real,” said U.S. Attorney Jay Clayton. “Millions of dollars in royalties that Smith diverted from real, deserving artists and rights holders.”

The investigation revealed Smith’s operation wasn’t just a few fake plays here and there; it was a systematic, large-scale effort to manipulate the royalty system. Prosecutors say the scale of the fraud is significant, impacting countless artists who rely on streaming revenue.

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