Alleged fraudster got $10 million in royalties using robots to stream AI-made music

Michael Smith, a 52-year-old North Carolina man, has been arrested and charged with fraud for allegedly uploading hundreds of thousands of AI-generated songs to streaming services and using bots to play them billions of times. Smith is accused of receiving over $10 million in royalties since 2017 through this scheme. He has been charged with wire fraud conspiracy, wire fraud, and money laundering conspiracy, each carrying a maximum sentence of 20 years in prison. This is the first criminal case involving the use of bots to artificially inflate music streaming numbers, according to the US Attorney's Office for the Southern District of New York. Smith initially uploaded his own music to streaming services but realized his catalog was not large enough to generate significant royalties. He then turned to AI-generated music in 2018, working with two unnamed co-conspirators to create hundreds of thousands of songs. Smith allegedly lied to streaming services by providing fake account details and agreeing to rules that ban streaming manipulation. He attempted to cover his tracks by using dummy email addresses and VPNs, and told his co-conspirators to be "undetectable." US Attorney Damian Williams stated that Smith's scheme stole millions in royalties that should have been paid to legitimate musicians, songwriters, and rights holders. The case contrasts with a musician profiled by The New York Times, Matt Farley, who has written, recorded, and uploaded tens of thousands of songs to streaming services in an entirely above-board manner, earning around $200,000 in 2023.