Alleged fraudster got $10 million in royalties using robots to stream AI-made music

A North Carolina man is facing fraud charges after allegedly uploading hundreds of thousands of AI-generated songs to streaming services and using bots to play them billions of times. Michael Smith is said to have received over $10 million in royalties since 2017 via the scheme.

Smith, 52, was arrested on Wednesday. An indictment [PDF] that was unsealed the same day accuses him of using the bots to steal royalty payments from platforms including Spotify, Apple Music and Amazon Music. Smith has been charged with wire fraud conspiracy, wire fraud and money laundering conspiracy. 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 that concerns the use of bots to artificially inflate music streaming numbers.

Prosecutors accused Smith of creating thousands of bots to stream the songs. At first, he was said to have uploaded his own music to the streaming services, but realized that his catalog wasn't big enough to produce a large sum of royalties. After other efforts didn't pan out, he's said to have turned to AI-generated music in 2018.

According to the indictment, Smith began working with two unnamed co-conspirators — the CEO of an AI music company and a music promoter — to create hundreds of thousands of songs using AI. In exchange for a cut of 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 the audio files.

Smith is accused of lying to streaming services by providing phony names and other fake account details while setting up the bots, and by agreeing to rules that ban streaming manipulation. According to the indictment, he deceived streaming services by making it seem the bot accounts were legit when in fact they "were hard coded to stream Smith’s music billions of times." Smith allegedly attempted to cover his tracks by using dummy email addresses and VPNs, while telling his co-conspirators to be “undetectable.”

"Michael Smith fraudulently streamed songs created with artificial intelligence billions of times in order to steal royalties," US Attorney Damian Williams said in a statement. "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."

The case of Smith is in stark contrast to a musician The New York Times profiled earlier this year. Matt Farley has written, recorded and uploaded tens of thousands of songs to streaming services about anything and everything people might search for, from celebrities and marriage proposals to many tunes about poop. Some songs are just a few seconds long, but the practice seems to be entirely above board. He's said to have earned around $200,000 from his music in 2023.