The U.S. Attorney for the Southern District of New York, and Christie M. Curtis, Acting Assistant Director in Charge of the FBI’s New York Field Office, announced the unsealing of a three-count indictment against Michael Smith, who allegedly created hundreds of thousands of artificial intelligence (AI)-generated songs and used automated “bot” programs to stream these songs billions of times, fraudulently obtaining more than $10 million in royalties.
Smith was arrested and will appear before a U.S. Magistrate Judge in North Carolina.
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U.S. Attorney Williams stated: “As alleged, Michael Smith used AI-generated songs and fraudulent streams to steal millions in royalties that should have gone to legitimate musicians and songwriters. Thanks to the work of the FBI and our office, Smith will now face justice.”
FBI Acting Assistant Director Curtis added: “Smith’s scheme exploited the integrity of the music industry by bypassing streaming platforms’ policies. The FBI is dedicated to stopping those who manipulate technology for illicit profit and undermine the work of real artists.”
Scheme Details:
According to the indictment, Smith created thousands of fake accounts on major streaming platforms such as Amazon Music, Apple Music, Spotify, and YouTube Music. Using these “bot accounts,” Smith manipulated streams of his AI-generated songs, securing fraudulent royalty payments. At one point, Smith estimated he could generate over 660,000 streams per day, yielding millions in annual royalties.
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To avoid detection, Smith distributed the fraudulent streams across thousands of songs, preventing any single song from attracting suspicion. He partnered with an AI music company to produce hundreds of thousands of tracks, which were then uploaded and streamed using bot accounts. The AI-generated songs had randomized file names, and Smith created fake artist names to further conceal the scheme.
Misrepresentations to Streaming Platforms:
Smith provided false information to streaming platforms, violating their terms of service by using bots to manipulate streams. These fraudulent streams led the platforms to report billions of plays of Smith’s music, even though they were generated by bots and not real listeners.
Smith’s actions resulted in him collecting over $10 million in fraudulent royalties.
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Charges and Potential Penalties:
Smith, 52, of Cornelius, North Carolina, is charged with:
- Wire fraud conspiracy (maximum sentence: 20 years)
- Wire fraud (maximum sentence: 20 years)
- Money laundering conspiracy (maximum sentence: 20 years)
The case is being prosecuted by the Complex Frauds and Cybercrime Unit of the U.S. Attorney’s Office, with Assistant U.S. Attorneys Nicholas W. Chiuchiolo and Kevin Mead leading the prosecution.
The charges and maximum sentences are set by Congress, but the final sentencing will be determined by a judge.
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