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AII-1002-44107
ConfirmedA court, a regulator or the organization itself has stated the core facts, or the record cites a court or regulator source.

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.

4 September 2024 Β· Michael Smith Β· Fraud, scams and manipulation
4 September 2024
AII-1002-441072 sources ↓
Quick facts
Category
Fraud, scams and manipulation
Country
United States
Source
routenote.com
Date
4 September 2024
Drafted by
Raidu Incident Detection

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

Category
Fraud, scams and manipulation
Industry
Arts, entertainment and recreation
Country
United States
Harm status
Actual harm
Intent
Intentional
Timing
Unknown
Harm types
Economic or property, Public interest
Harmed
Business
Failure modes
Manipulation or dark pattern
Consequences
Litigation
AI systems
AI music generation system

Sources and evidence

This record was researched and written by the Index, based on the following original reporting.

routenote.com
Music producer pleads guilty to streaming fraud with AI-generated songs
variety.com
Music producer pleads guilty to streaming fraud with AI-generated songs