The U.S. Department of Justice announced that Michael Smith, a North Carolina man, pleaded guilty on March 19 before a federal judge in the Southern District of New York to one count of conspiracy to commit wire fraud. Smith used artificial intelligence to generate hundreds of thousands of fake songs and deployed thousands of automated bot accounts on streaming platforms like Spotify, Apple Music, and YouTube Music to generate billions of fraudulent streams, netting more than $10 million in royalty payments. The DOJ described this as the first federal criminal conviction for AI-based music streaming fraud.
AI Songs + Bot Army: A Three-Step Scheme
According to court documents, Smith's scheme operated in three phases. First, he mass-produced AI-generated songs, giving them random artist and track names such as "Zygophyceae" or "Calliope Bloom" to avoid detection. Second, he built a network of thousands of bot accounts across major streaming services. Third, he distributed plays evenly across those songs using automated software, mimicking legitimate listener behavior to evade platform anti-fraud alarms. This careful orchestration allowed the scheme to run for years undetected.
Illicit Royalties Stolen from Real Artists
U.S. Attorney Jay Clayton for the Southern District of New York stated: "Michael Smith used artificial intelligence to generate thousands of fake songs and then streamed them billions of times. Though the songs and listeners were fake, the millions of dollars he stole were very real." The indictment notes that streaming platforms typically pool royalty payments and distribute them based on play counts. Smith's fraudulent plays directly diverted money from legitimate songwriters and rights holders. With his guilty plea, Smith faces a maximum sentence of 20 years in prison for conspiracy to commit wire fraud. The case is expected to push streaming giants to further tighten AI and bot detection mechanisms to protect creators' earnings.