AI Music Streaming Fraud Conviction

The first-ever criminal case involving AI-assisted music streaming fraud has concluded, with an American citizen getting 18 months behind bars and an $8 million fine. North Carolina resident Michael Smith, 54, was charged in September 2024, pleaded guilty to conspiracy to commit wire fraud in March 2026, and was sentenced earlier this week. The lengthy case, investigated by the FBI, involves some extraordinary numbers. In one example cited by the DOJ, in April 2023, Smith earned royalties from 80.9 million streams of his AI-generated songs by bots with family accounts.

“By flooding music streaming platforms with automated bots in the place of consumers, and fake songs in the place of creativity, Smith robbed millions in royalty payments from genuine artists and their fans,” said U.S. Attorney Jamie McDonald.

Operation Scale and Execution

Smith’s operation scaled massively between 2017 and 2024. He created thousands of fake streaming accounts on services like Spotify, YouTube Music, Apple Music, and Amazon Music. At the same time, he used AI to generate music to host on these services. The idea was to get his army of bots to continuously stream his own AI songs, and thus profit from royalty payments.

As many as 10,000 bots would continuously consume streams of his AI-generated music. He created hundreds of thousands of AI-generated songs to make sure it wasn’t just a few tracks on repeat, and make the music appreciation seem legitimate. During the fraud’s lifetime, Smith’s AI-generated music tracks were streamed billions of times, says the court report. Prosecutors say Smith managed to net more than $8 million in fraudulent royalty payments.

According to the U.S. Attorney's Office, Southern District of New York PR, in April 2023, the entire catalogue of Taylor Swift received 9.3 million streams on YouTube Music from family plan streams, while in the same month, Smith’s bot accounts used family plans to fraudulently stream his AI-generated music 80.9 million times.

Now Smith faces 18 months behind bars, then two years of supervised release, and an order to pay $8,091,843.64 in forfeiture.