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Michael Smith, a 54-year-old North Carolina musician, was sentenced to 18 months in prison for his role in a fraudulent scheme involving AI-generated music and bots. From 2017 to 2024, he used AI-generated music and bots to boost streams on Spotify, Apple Music, Amazon Music, and YouTube Music, ultimately accumulating billions of streams and reaping millions of dollars in royalties. We reported
on the beginning of this story back in 2024, and in March 2026, we reported that Smith pleaded guilty to conspiracy to commit wire fraud. According to investigators, Smith created thousands of fictitious user accounts using fake email addresses and fraudulently obtained credit card information, then ran software that continuously played his own tracks for these accounts. To conceal his suspicious activity, the bots connected through a VPN. To prevent anti-fraud systems from detecting the anomaly, Smith distributed the plays across a huge number of tracks. To do this, he enlisted the help of an unnamed music promoter and the CEO of a company specializing in AI-powered music. Smith purchased hundreds of thousands of AI-generated songs from his accomplice and then uploaded them to streaming platforms.
At certain points, up to 10,000 bot accounts were simultaneously involved in this fraudulent scheme. The DOJ notes that the scale of the scheme is well illustrated by data from April 2023: Taylor Swift's songs on YouTube Music were listened to 9.3 million times in a month, while Smith's AI-generated tracks were listened to 80.9 million times.
In a financial report Smith sent to himself in October 2017, he calculated that 52 cloud accounts, each with 20 bots, were capable of generating approximately 661,440 plays per day. At an average royalty rate of half a cent per play, this generated $3,307.20 daily, over $99,000 per month, and over $1.2 million per year.
In an email dated February 2024, Smith boasted to his accomplices that the songs had already garnered "over 4 billion streams and generated $12 million in royalties since 2019."
However, the case materials cite different figures for the fraudulent income. For example, a recent statement from the US Department of Justice cites $8 million in illegally obtained royalties, and the court ordered the confiscation of $8,091,843.64 from Smith.
Moreover, according to the prosecution, the losses were not only suffered by the streaming services themselves, but also by the musicians and copyright holders. The fact is that royalties are distributed from a common pool, so artificially inflated streams reduced payments to genuine artists.
The lawyers requested probation for Smith and argued that he did not receive the full $8 million and was "deeply remorseful." The defense also claimed that Smith was offered a $5,000-per-month job doing "audio production, mixing, mastering, and recording for a record label." The lawyers argued that a prison sentence would merely delay the payment of the forfeited funds.
However, prosecutors insisted on a prison sentence, citing the long-running nature of the fraudulent scheme, attempts to conceal the illegal activity, and the fact that Smith lied to law enforcement when questioned about the situation.
Ultimately, the court sentenced Smith to 18 months in prison, and he will be required to serve two years of supervised release after his release.
on the beginning of this story back in 2024, and in March 2026, we reported that Smith pleaded guilty to conspiracy to commit wire fraud. According to investigators, Smith created thousands of fictitious user accounts using fake email addresses and fraudulently obtained credit card information, then ran software that continuously played his own tracks for these accounts. To conceal his suspicious activity, the bots connected through a VPN. To prevent anti-fraud systems from detecting the anomaly, Smith distributed the plays across a huge number of tracks. To do this, he enlisted the help of an unnamed music promoter and the CEO of a company specializing in AI-powered music. Smith purchased hundreds of thousands of AI-generated songs from his accomplice and then uploaded them to streaming platforms.
| "To avoid suspicion from the powers that be, we need a TON of content with a low number of streams," Smith wrote to his accomplices on October 4, 2018. "We need to get a TON of songs fast to bypass the anti-fraud policies these guys are using now." |
In a financial report Smith sent to himself in October 2017, he calculated that 52 cloud accounts, each with 20 bots, were capable of generating approximately 661,440 plays per day. At an average royalty rate of half a cent per play, this generated $3,307.20 daily, over $99,000 per month, and over $1.2 million per year.
In an email dated February 2024, Smith boasted to his accomplices that the songs had already garnered "over 4 billion streams and generated $12 million in royalties since 2019."
However, the case materials cite different figures for the fraudulent income. For example, a recent statement from the US Department of Justice cites $8 million in illegally obtained royalties, and the court ordered the confiscation of $8,091,843.64 from Smith.
Moreover, according to the prosecution, the losses were not only suffered by the streaming services themselves, but also by the musicians and copyright holders. The fact is that royalties are distributed from a common pool, so artificially inflated streams reduced payments to genuine artists.
The lawyers requested probation for Smith and argued that he did not receive the full $8 million and was "deeply remorseful." The defense also claimed that Smith was offered a $5,000-per-month job doing "audio production, mixing, mastering, and recording for a record label." The lawyers argued that a prison sentence would merely delay the payment of the forfeited funds.
However, prosecutors insisted on a prison sentence, citing the long-running nature of the fraudulent scheme, attempts to conceal the illegal activity, and the fact that Smith lied to law enforcement when questioned about the situation.
Ultimately, the court sentenced Smith to 18 months in prison, and he will be required to serve two years of supervised release after his release.