AI-powered music scam nets musician $10M in royalties–and federal charges
North Carolina musician Michael Smith faces charges for defrauding streaming services of $10 million by creating fake songs and using bots to inflate streaming numbers, marking a significant legal precedent.
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Federal prosecutors have charged North Carolina musician Michael Smith with defrauding streaming services of $10 million through an elaborate scheme involving artificial intelligence. Smith, 52, allegedly created hundreds of thousands of fake songs attributed to nonexistent bands and used bots to stream them, collecting royalties from platforms like Spotify, Apple Music, and Amazon Music. This case is notable as it marks the first criminal prosecution in the U.S. for artificially inflating music streaming numbers. The charges against Smith include wire fraud and money laundering conspiracy, with potential prison sentences of up to 20 years for each count. His operation, which reportedly lasted seven years, involved creating fake streaming accounts and using software to play his AI-generated music on repeat, simulating individual listeners. Initially, Smith attempted to earn income through original compositions and collaborations but shifted to AI-generated music in 2018 after these efforts failed. By 2019, he claimed to have achieved 4 billion streams and $12 million in royalties, despite denying any wrongdoing when confronted about streaming abuse. The case highlights the intersection of technology and music industry fraud, raising concerns about the integrity of streaming metrics.
- Michael Smith is charged with defrauding streaming services of $10 million using AI-generated music.
- The scheme involved creating fake songs and streaming them with bots to collect royalties.
- Smith faces charges of wire fraud and money laundering, with potential sentences of up to 20 years.
- The operation lasted seven years and included billions of fabricated streams.
- This case is the first U.S. criminal prosecution for artificially inflating music streaming numbers.
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North Carolina musician Michael Smith faces fraud charges for using AI to create fake music, allegedly earning $10 million by manipulating streaming services over seven years, risking 20 years in prison per charge.
15 commentsDespite the title, there is little AI in here. The automatically generated music barely existed seven years ago. It really does not matter what noise you upload to these services, as it is not really validated. It’s just bots streaming your songs, like you can have bots viewing your website for ad impressions.
I've little sympathy for Spotify and the rest _but_ this scheme -- if I understand how Spotify pays out -- reduces payouts to other folks. I don't know if society is well-served by sending him to prison, but he should definitely be penalized somehow until that money, plus damages, is redirected to actual artists.
Not a lawyer but I don't see how this is "fraud" or a "scam". He created actual music, which people listened to, and by listening to them, generated royalties. The fact that he could use AI to create hundreds of thousands of different songs is a problem for the music industry, but that's an AI problem in general (art, writing, etc.)
Ah, OK, I see the problem further down in the article. This was the illegal part:
> 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
For someone smart enough to create bot listeners, it's weird that he wasn't smart enough to not write emails about it :/
That's the only way I can see this scheme working. But it seems odd to me that spotify would not put substantial walls up to validate new users, to prevent what is effectively musical adclick fraud.
I mean, those sound like pretty rad names for punk bands and punk songs. Hadn't heard such original names since Seth Putnam left us.
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