A 52-year-old musician, Michael Smith, from Cornelius, North Carolina, has been accused of orchestrating a large-scale AI music fraud scheme, resulting in over $10 million in illicit royalty payments. Federal prosecutors claim Smith, alongside the CEO of an AI company and a music promoter, used artificial intelligence to create “hundreds of thousands of songs” and employed bots to fraudulently stream these tracks billions of times.
The fraudulent operation, which began in 2017, is alleged to have generated 661,440 streams per day, yielding annual royalties of $1 million. Smith is now facing three charges, including wire fraud, wire fraud conspiracy, and money laundering conspiracy. These charges could result in up to 60 years in prison.
According to US Attorney Damian Williams, Smith’s scheme involved stealing millions in royalties that rightfully belonged to musicians, songwriters, and other rights holders. He is accused of creating thousands of fake accounts on streaming platforms to drive up streams, using bot accounts that ran up to 10,000 times simultaneously.
To avoid detection, Smith allegedly spread the streams across thousands of songs and enlisted help from the CEO of an AI company and a music promoter to generate enough tracks. Emails from 2018 reveal Smith strategizing with his co-conspirators to “get a TON of songs fast” to bypass anti-fraud measures.
The indictment also alleges that Smith lied to streaming platforms, using false identities and information to create bot accounts and agreeing to terms that prohibited streaming manipulation. The fraudulent activities spanned multiple years, and Smith was arrested on Wednesday. His lawyer has declined to comment.
Authorities, including FBI Acting Assistant Director Christie M. Curtis, stressed the harm caused by the fraud, which undermined the integrity of the music industry. The FBI is committed to holding individuals accountable for manipulating technology for illicit profit.
