A U.S. grand jury has indicted 52-year-old Michael Smith on charges of conspiracy to commit wire fraud and money laundering. Smith allegedly used artificial intelligence (AI) and automated bots to inflate his music streams on streaming platforms, earning millions of dollars in illegitimate royalties.
According to the unsealed indictment from the Department of Justice, Smith purchased AI-generated music, uploaded it to popular platforms like Spotify, Apple Music, and YouTube Music, and then employed bots to artificially boost the number of streams.
Court documents reveal that Smith generated “over 4 billion streams and $12 million in royalties since 2019.” This meant he earned roughly $2.4 million annually through this scheme.
The number of streams he needed per year to generate that revenue is even massive. Royalty payments typically fall below one cent per stream, so Smith must have garnered over 240 million streams per year, most of which were from automated sources.
The music industry strictly prohibits the artificial manipulation of streams, as it undermines legitimate artists. Money intended for creators gets diverted to accounts exploiting bots for inflated play counts.
The severity of Smith’s alleged actions prompted FBI involvement. Christie M. Curtis, Acting Assistant Director in Charge of the New York FBI Field Office, stated, “Michael Smith allegedly produced hundreds of thousands of songs with artificial intelligence and utilized automatic features to repeatedly stream the music to generate unlawful royalties to $10 million.
U.S. Attorney Damian Williams emphasized, “Through his brazen fraud scheme, Smith stole millions in royalties that should have been paid to musicians, songwriters, and other rights holders whose songs were legitimately streamed. Today, thanks to the work of the FBI and the career prosecutors of this Office, it’s time for Smith to face the music.”
Smith was arrested in September 2024 and will face a maximum penalty of 20 years imprisonment for each charge if convicted.
