In a landmark case, Michael Smith, a 52-year-old musician from North Carolina, faces up to 20 years in prison after being charged with orchestrating a massive streaming fraud scheme.
Between 2017 and 2024, Smith allegedly created hundreds of thousands of AI-generated songs and used automated bots to repeatedly stream these tracks on platforms like Spotify, Amazon Music, Apple Music, and YouTube Music. This allowed him to fraudulently collect over $10 million in royalty payments.
According to prosecutors, Smith’s scheme involved the creation of multiple bot accounts that streamed the AI-generated songs billions of times. To avoid detection, he used virtual private networks (VPNs) to mask the origins of the streams, spreading them across thousands of songs to avoid suspicion. By doing this, he was able to manipulate streaming data and divert funds away from legitimate musicians, songwriters, and rights holders who should have received royalties for their actual streams.
The indictment marks the first criminal case of its kind involving the use of AI in the music industry for fraudulent purposes. Smith is charged with wire fraud, conspiracy to commit wire fraud, and money laundering, with each charge carrying a maximum sentence of 20 years in prison. His fraudulent actions have highlighted the vulnerabilities in the music streaming industry, particularly concerning the growing influence of AI technology.
This case underscores the potential for misuse of AI in creative industries and raises questions about how streaming platforms can better protect against fraudulent activity in the future.
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