A North Carolina man, Michael Smith, has been sentenced to 18 months in prison for orchestrating an AI-assisted music streaming fraud scheme that stole over $8 million. Smith created hundreds of thousands of AI-generated songs and used bots to generate billions of streams, defrauding music platforms and impacting genuine artists' royalties.
The case highlights the growing threat of AI-driven fraud in digital content industries, demonstrating how artificial intelligence can be used to manipulate streaming platforms, steal significant revenue, and impact the livelihoods of legitimate artists.
Michael Smith, a 54-year-old North Carolina man, has been sentenced to 18 months in prison and ordered to forfeit over $8 million for orchestrating an AI-assisted music streaming fraud scheme. The U.S. Department of Justice announced the sentencing on Tuesday, noting that Smith is the first American to be criminally charged with AI-assisted streaming fraud.
Smith began his scheme in 2017, using fake email accounts and stolen debit cards to create thousands of fraudulent accounts on platforms like Amazon Music, Apple Music, Spotify, and YouTube Music. He then employed software to continuously stream songs he claimed to own, which were generated using artificial intelligence. By the time of his arrest in 2024, he had created hundreds of thousands of AI-generated songs and dispersed billions of automated streams across them to avoid detection.
According to the DOJ, Smith's fraudulent streams significantly surpassed those of popular artists. In April 2023 alone, his fake songs were streamed 80.9 million times, while Taylor Swift's entire catalog received 9.3 million streams during the same period. The DOJ stated that this fraud not only harmed streaming platforms but also reduced royalty payouts for legitimate artists.
Smith's legal team argued for probation, citing his remorse and a job offer, and suggested the DOJ was making an example of him. However, the DOJ countered that Smith engaged in deceptive tactics, lied to law enforcement, and that a significant sentence was necessary for deterrence. The court ultimately ruled for the prison sentence and forfeiture of the ill-gotten gains.
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