Michael Smith, a musician from North Carolina, was charged with earning more than $10 million by fraudulently increasing streams of Artificial Intelligence (AI)- generated songs through automated streaming bots.
The musician received royalty payments from streaming platforms such as Spotify, Apple Music, YouTube Music and Amazon Music after the AI-generated songs were streamed by over a thousand bots. Court documents stated that he was assisted in the fraudulent scheme between 2017 and 2024 by an anonymous music promoter and CEO of an AI music company.
Smith bought, “hundreds of thousands,” of AI-produced songs from a coconspirator and uploaded them to streaming platforms. Automated bot programs were then used to stream the tracks billions of times, inflating the streams, leading to higher revenue from streaming royalty payments.
The accused ensured that the bots accessed streaming platforms via virtual private networks (VPNs) to evade detection from the platforms’ anti-fraud techniques. On October 4, 2018, he emailed his accomplices that they needed a higher number of songs with a small number of streams on each one to avoid issues with “the powers.”
During the prime period of his scheme, Smith reportedly created over a thousand emails and bot accounts to artificially boost streams. On October 20, 2017, he sent an email to himself containing a financial breakdown of his operations. The email disclosed details such as the operation of 52 cloud service accounts (20 bot accounts in each account), resulting in a total of 1,040 bots.
It also estimated that each account could stream 636 songs every day, amounting to approximately 661,440 daily streams. At the average royalties rate of half a cent for each stream, the calculated earnings were estimated to be $3,307.20 daily, $99,216 monthly, and over $1.2 million annually. An email in February 2024 boasted the revenue and streams received on his songs since 2019.
Through the fraudulent scheme, “Smith stole millions in royalties that should have been paid to musicians, songwriters, and other rights holders whose songs were legitimately streamed,” said US Attorney, Damian Williams.
Smith was charged with wire fraud, wire fraud conspiracy, and money laundering conspiracy, each of which carries a maximum sentence of 20 years in prison. However, the charges are currently treated as accusations, as Smith is presumed innocent until proven guilty.
In the News: Wikipedia faces contempt notice over ANI defamation case
