Man Pleads Guilty to $8M AI Music Streaming Fraud

A 54-year-old man from Cornelius, North Carolina, has pleaded guilty to running a large-scale music streaming fraud that generated over $8 million in royalties. Michael Smith was charged by U.S. federal prosecutors in 2024, with authorities stating that the operation began as early as 2017. He pleaded guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of five years in prison. Smith has also agreed to pay over $8 million in forfeiture with the exact amount stated to be $8,091,843.64.

How was the fraud done

According to a press release from the Department of Justice, Smith created thousands of bot accounts across streaming platforms and used automated software to repeatedly stream his songs. He also used AI to generate “hundreds of thousands” of songs, allowing him to increase streaming volume. To avoid detection, Smith spread the streams across a large number of tracks, reducing the chances that any single song would appear suspicious.

What do the authorities have to say?

U.S. Attorney Jay Clayton described the operation as a large-scale fraud targeting the music industry. “Michael Smith generated thousands of fake songs using artificial intelligence and then streamed those fake songs billions of times,” he said. “Although the songs and listeners were fake, the millions of dollars Smith stole was real.”

What Happens Next

Smith has been scheduled to be sentenced in July. While we have previously addressed the potential misuse of AI, this case is one of the first, and one of the most concerning, to come into the spotlight

For more such articles, read:

JBL launches Speaker and Mics with new EasySing AI Karaoke Technology

Sennheiser Brings Dolby Atmos Audio to the smart #5