Man Going To Prison After Using AI Music To Fraudulently Generate Over RM33 Million In Royalties
He generated AI songs, then used bots to listen to them and raked in the royalties.
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A federal judge in the US sentenced a North Carolina man to 18 months in prison on 6 October for operating an elaborate artificial intelligence (AI) music streaming fraud
Michael Smith, 54, siphoned over USD8 million (RM33 million) in royalty payments from platforms including Spotify, Apple Music, and YouTube Music.
US District Judge John G Koeltl imposed the prison term alongside two years of supervised release and ordered an official forfeiture amounting to USD8,091,843.64 (RM33.06 million).
Smith had previously pleaded guilty in March to conspiracy to commit wire fraud following an extensive federal investigation into his operations, which ran continuously from 2017 through 2024
To execute the scheme without triggering automated security flags, Smith deployed a network of up to 10,000 automated bot accounts simultaneously. He maintained these non-existent listeners using fake email addresses and fraudulently acquired debit cards.
Recognising that concentrating millions of plays onto a single track would raise immediate suspicion with digital service providers, Smith acquired hundreds of thousands of AI-generated tracks, which he referred to in correspondence as "instant music". He then programmed his automated accounts to distribute streams across the vast catalogue in small, scattered volumes.
Image used for illustration purposes only.
Image via Mihis Alex/PexelsThe strategy proved extraordinarily lucrative across major streaming services
Court records revealed that during April 2023 alone, Smith's automated accounts generated 80.9 million streams on YouTube Music family plans, surpassing the 9.3 million total streams logged by pop star Taylor Swift's entire music catalogue on those same subscription tiers during that timeframe.
Federal prosecutors advocated for a sentence of at least 46 months, while the probation department recommended 24 months. Defence attorneys argued for probation, claiming the financial loss spread across individual artistes was negligible.
However, anti-fraud advocacy groups, including the Music Fights Fraud Alliance, urged the court to issue a firm sentence to demonstrate the real-world financial impact of streaming fraud on working musicians.
