Michael Smith pleaded guilty to conspiracy to commit wire fraud in the Southern District of New York after prosecutors said he used artificial intelligence and automated accounts to generate and stream fake songs that collected over $8 million in music streaming royalties, described as AI-generated music streaming fraud.
Officials said he created thousands of AI-generated tracks and streamed them billions of times using thousands of accounts to inflate plays.
He agreed to forfeit the royalties and faces up to five years in prison.
Michael Smith generated thousands of fake songs using artificial intelligence and assembled a catalog that included both his own recordings and hundreds of thousands of AI-generated tracks. He created thousands of automated accounts on streaming platforms to play songs he owned and then streamed those fake songs billions of times, using software to automate plays and inflate reported stream counts. When first charged in September 2024, prosecutors said Smith used automated software to generate roughly 661,440 streams per day.
Prosecutors estimated that the automated streaming produced around $1.2 million in annual royalties at the time of the initial charges and that the broader scheme ultimately collected more than $8 million in music streaming royalties. The case mentions use of AI music tools Suno, Udio, and Google’s Lyria, and identified major streaming services involved in the plays, including Spotify, Apple Music, Amazon Music and YouTube Music. The scheme relied on the distribution model used by streaming services, which allocate royalty payments based on reported play counts, creating an opportunity to inflate royalties by artificially increasing streams.
Michael Smith, from North Carolina, pleaded guilty to conspiracy to commit wire fraud, a charge related to his use of artificial intelligence and automated bots to generate billions of streams of fake songs, ultimately collecting over $8 million in royalties. As part of his plea agreement in the Southern District of New York, Smith has agreed to forfeit the fraudulently obtained royalties. He faces up to five years in prison, with sentencing scheduled for July 29. Smith was released on a $500,000 bond while awaiting sentencing.
In a statement from the U.S. Department of Justice, U.S. Attorney Jay Clayton highlighted Smith’s use of AI and automated accounts to create an illusion of popularity, diverting millions in royalties from genuine artists. This case underscores the complexity and evolving nature of technology-facilitated fraud within the music industry.
The case involved a guilty plea for using artificial intelligence and thousands of automated accounts to create and stream fake music, a scheme that prosecutors said inflated play counts and diverted streaming royalty payments from legitimate artists. The defendant agreed to forfeit the royalty payments obtained through the scheme. Criminal sentencing and related court proceedings remain pending in federal court.
