The US Justice Department has sentenced a man to 18 months in prison in what it describes as its first-ever criminal case involving AI music streaming fraud.
Michael Smith used thousands of automated accounts and hundreds of thousands of AI-generated songs to manufacture billions of fake streams between 2017 and 2024, fraudulently obtaining more than $8 million in royalties from music streaming platforms.
Smith, of North Carolina, previously pleaded guilty to one count of conspiracy to commit wire fraud.
“Michael Smith exploited [AI] technology to generate a fraud,” said Jamie McDonald, US Attorney for the Southern District of New York. “By flooding music streaming platforms with automated bots in the place of consumers, and fake songs in the place of creativity, Smith robbed millions in royalty payments from genuine artists and their fans. This Office is committed to ensuring the integrity of all markets, and protecting the public from those who use super intelligence for fraud.”
According to the DOJ, Smith created thousands of fake accounts on music streaming platforms, using fake email addresses and fraudulently obtained debit cards, and used software to make the accounts repeatedly stream his music.
This result sends a clear message that streaming fraud is a crime and has serious consequences
IFPI
To avoid detection, Smith spread the streams across thousands of songs. At times, he was using as many as 10,000 bot accounts at once.
In or about 2018, according to the indictment, Smith began working with the CEO of an AI music company and a music promoter to create hundreds of thousands of songs using AI. The company then provided Smith with thousands of songs each week, which he uploaded to streaming platforms.
Smith's bot accounts ultimately streamed the AI-generated songs billions of times. The DOJ says that in April 2023, Taylor Swift's entire catalogue received 9.3 million streams on YouTube Music from family plan streams, while in the same month, Smith’s Bot Accounts used family plans to fraudulently stream his AI-generated music 80.9m times.
A spokesperson for trade body the Recording Industry Association of America (RIAA) said: “Streaming fraud harms creators and deceives fans. We appreciate the Court recognising the significance of this harmful conduct and the ill-gotten gains that come from the pockets of real artists, songwriters and their label partners.”
The IFPI added in a statement: “This result sends a clear message that streaming fraud is a crime and has serious consequences. But enforcement is only one part of tackling streaming fraud – we also need to prevent, detect and disrupt fraudulent activity. The global music industry is collectively doing just that through the Streaming Integrity Initiative which protects artists, rightsholders and fans and strengthens trust in streaming.”
