Music producer pleads guilty to streaming fraud with AI-generated songs
A North Carolina music producer pleaded guilty to operating a large-scale streaming fraud scheme using AI-generated songs and bot accounts to steal over $8 million in royalties from music platforms and artists. He created hundreds of thousands of fake songs and manipulated streaming systems across Spotify, Amazon Music, and Apple Music with automated accounts before being caught and prosecuted by federal authorities.
What happened
Michael Smith, 52, of Cornelius, North Carolina, created hundreds of thousands of AI-generated songs and used more than 1,000 bot accounts to stream them repeatedly on Spotify, Amazon Music, and Apple Music. He worked with an AI music company beginning in 2018 and a music promoter to generate the songs, bought bulk email addresses to create fake accounts, and used a VPN service to conceal that he controlled them all from his home.
Smith's operation generated approximately 661,440 streams per day at its peak, accumulating billions of fake streams and over $8 million in fraudulent royalties. He initially tried to game individual song streams but shifted to generating as much music as possible to evade platform fraud detection systems.
Reported impact
Smith diverted millions of dollars in royalties from real, deserving artists and rights holders. The Mechanical Licensing Collective withheld payment of associated mechanical royalties after identifying and challenging the alleged misconduct in 2023.
Index analysis
Smith pleaded guilty to one count of conspiracy to commit wire fraud and agreed to forfeit $8,091,843.64 in fraudulent royalties. He was initially charged with wire fraud, wire fraud conspiracy, and money laundering conspiracy in the Southern District of New York, each carrying a potential 20-year sentence.
Governance controls
The Mechanical Licensing Collective identified the fraud in 2023 when Smith denied that his works were AI-generated, despite rapid music generation volumes. One streaming platform also accused Smith of fraud in 2019, which he denied; prosecutors contend these denials were false.
Classification
Sources and evidence
This record was researched and written by the Index, based on the following original reporting.