North Carolina Man Sentenced for $8M AI Music Fraud

Michael Smith, a 54-year-old man from North Carolina, was sentenced to 18 months in prison on October 6 after pleading guilty to conspiracy to commit wire fraud. He was also ordered to forfeit $8,091,843.64 obtained through his fraudulent activities.

According to the US Department of Justice, Smith's scheme, which took place between 2017 and 2024, involved creating thousands of fake accounts on streaming platforms such as Spotify, Apple Music, Amazon Music, and YouTube Music. He utilized automated software to generate artificial streams for hundreds of thousands of AI-generated songs, evading the platforms' anti-fraud systems.

At the height of his operation, Smith used up to 10,000 automated accounts simultaneously, resulting in billions of streams. In April 2023, his accounts generated 80.9 million streams on YouTube Music, significantly surpassing the 9.3 million streams of Taylor Swift's entire catalogue during the same period.

US Attorney Jamie McDonald stated that Smith exploited AI technology to defraud streaming platforms and deprive legitimate artists of their royalties.