North Carolina musician Michael Smith has been sentenced to 18 months in federal prison for streaming royalty fraud that collected more than $10 million through AI-generated music and automated listening bots on Spotify, Apple Music, Amazon Music and YouTube Music.
Key takeaways
Smith’s scheme inflated music streams between 2017 and 2024.
The operation used more than 1,000 bot accounts at its peak.
The sentence includes $8,091,843.64 in forfeiture and two years of supervised release.
The 54-year-old pleaded guilty in March following his indictment in September 2024, according to BleepingComputer. Court documents describe hundreds of thousands of AI-generated tracks played billions of times by bots rather than human listeners.
Prison and forfeiture for streaming royalty fraud
Smith’s penalties extend beyond imprisonment: he must pay $8,091,843.64 in forfeiture and serve two years of supervised release. The fraudulent royalty collections exceeded $10 million across the four streaming platforms.
The case covers inflated listening figures from 2017 to 2024. Smith bought AI-generated songs from an accomplice and uploaded them with assistance from an AI music company’s chief executive officer and a music promoter, court documents show.
How AI-generated songs and bots powered the scheme
Smith paired a vast catalogue of AI-generated music with automated bots that repeatedly streamed the tracks. At the operation’s peak, he controlled more than 1,000 bot accounts to manufacture listening activity.
Cloud accounts and daily revenue
An email Smith sent himself on October 20, 2017, laid out the operation’s finances. It described 52 cloud service accounts, with 20 bot accounts attached to each.
Smith estimated that each bot could play around 636 songs daily, producing approximately 661,440 streams per day. Using an average royalty payment of half a cent per stream, his calculations put earnings at $3,307.20 daily, $99,216 monthly and more than $1.2 million annually.
VPNs and a larger catalogue to evade detection
The bots connected through virtual private networks to avoid platforms’ anti-fraud systems. Smith also sought more songs so the artificial listening activity would spread across a larger catalogue.
In an October 4, 2018, email to accomplices, he wrote that they needed “a TON of content with small amounts of Streams,” linking that approach to avoiding problems with streaming services’ anti-fraud policies.
Royalty losses and the Justice Department’s comparison
U.S. Attorney Jamie McDonald said Smith’s operation stole millions in royalty payments from genuine artists and their fans. He described automated bots replacing consumers and fake songs replacing creative work.
The Department of Justice illustrated the scale using YouTube Music family-plan streams in April 2023. Taylor Swift’s entire catalogue received 9.3 million such streams that month, compared with 80.9 million fraudulent plays of Smith’s AI-generated music through bot accounts using family plans.
In a February 2024 email to accomplices, Smith claimed the songs had produced “over 4 billion streams and $12 million in royalties since 2019.” Those figures were his own boast, distinct from the reported finding that he fraudulently collected more than $10 million.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.