A North Carolina man is facing fraud charges after he allegedly uploaded hundreds of thousands of AI-generated songs to streaming services and used bots to play them billions of times. Michael Smith is said to have received more than $10 million in royalties since 2017 through the scheme.
Smith, 52, was arrested Wednesday. An indictment [PDF] was released the same day accusing him of using bots to steal royalty payments from platforms like Spotify, Apple Music and Amazon Music.
Smith is charged with conspiracy to commit wire fraud, conspiracy to commit wire fraud and money laundering. Each count carries a maximum sentence of 20 years in prison. The US Attorney’s Office for the Southern District of New York says this is its first criminal case alleging the use of bots to artificially inflate music streaming numbers.
Prosecutors accused Smith of creating thousands of bots to stream songs. He previously said he had uploaded his own music to streaming services, but realized his catalog wasn’t large enough to generate a significant amount of royalties.
After other attempts failed, he turned to AI-generated music in 2018. According to the indictment, Smith, along with two unnamed co-conspirators — the CEO of an AI music company and a music promoter — began creating hundreds of thousands of songs using AI.
In exchange for a cut of the revenue, the CEO allegedly provided thousands of tracks per week to Smith, who is said to have randomly generated song titles and artist names for audio files. Smith is accused of lying to streaming services by providing fake names and other bogus account details when setting up the bot and agreeing to rules prohibiting streaming manipulation.
According to the indictment, he defrauded streaming services by making it appear that the bot accounts were legitimate, when in fact they were “hard coded to stream Smith’s music billions of times.” Smith allegedly attempted to hide his tracks by using dummy email addresses and VPNs, describing his co-conspirators as “unknown.”
“Michael Smith fraudulently streamed songs created with artificial intelligence billions of times to steal royalties,” US Attorney Damian Williams said in a statement. “Through his brazen fraudulent scheme, Smith stole millions in royalties that should have been paid to the musicians, songwriters and other rights holders whose songs were legitimately streamed.”
Smith’s case is a far cry from the musician profiled by the New York Times earlier this year. Matt Farley has written, recorded and uploaded thousands of songs to streaming services on every topic people might search for, including several songs about celebrities and marriage proposals to feces. Some of the songs are just a few seconds long, but the practice appears to be completely legitimate. He is said to have earned about $200,000 from his music in 2023.