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NEW YORK, NY – Michael Smith, a resident of North Carolina, copped a plea in federal court today for a brazen scheme to rip off music streaming services and the artists they pay. Smith didn’t write songs, he didn’t play instruments, and he didn’t have a fanbase. He had AI and a whole lot of bots.
Federal prosecutors in the Southern District of New York say Smith flooded platforms like Spotify, Apple Music, and Amazon Music with hundreds of thousands of AI-generated tracks. Then, using automated programs, he artificially inflated the stream counts into the billions. The goal? To funnel royalty payments meant for real musicians into his own pocket.
“Smith generated thousands of fake songs using artificial intelligence and then streamed those fake songs billions of times,” said U.S. Attorney Jay Clayton, laying out the core of the scam. “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.”
The indictment detailed how Smith created thousands of “bot accounts” on the streaming platforms, essentially phantom users dedicated to playing his fake tracks over and over. Each stream triggers a tiny royalty payment, and those payments add up fast. By manipulating the system, Smith siphoned funds from a pool meant to compensate legitimate artists for actual plays.
Smith pleaded guilty to conspiracy to commit wire fraud before Judge John G. Koeltl. Sentencing is pending, but the jig is up on this high-tech heist.