North Carolina musician Michael Smith was indicted for amassing over $10 million in royalty funds from Spotify, Amazon Music, Apple Music, and YouTube Music utilizing AI-generated songs streamed by hundreds of bots in a large streaming fraud scheme.
In response to court docket paperwork, Smith fraudulently inflated music streams on digital platforms between 2017 and 2024 with the help of an unnamed music promoter and the Chief Government Officer of an AI music firm.
He acquired a whole bunch of hundreds of songs generated by way of synthetic intelligence (AI) from a coconspirator and uploaded them to those streaming platforms. He then used automated bots to stream the AI-generated tracks billions of occasions.
To keep away from detection by the streaming platforms’ anti-fraud programs, Smith ensured his bots accessed the platforms utilizing digital non-public networks (VPNs).
On October 4, 2018, he emailed his coconspirators to say, “in order to not raise any issues with the powers that be we need a TON of content with small amounts of Streams.”
He additionally mentioned, “We need to get a TON of songs fast to make this work around the anti fraud policies these guys are all using now.”
4 billion pretend streams unfold over 5 years
On the peak of his operation, Smith allegedly employed over 1,000 bot accounts to artificially enhance streams throughout varied platforms. On October 20, 2017, Smith emailed himself a monetary breakdown outlining how he operated 52 cloud providers accounts, every with 20 bot accounts, totaling 1,040 bots.
He additionally estimated that every account might stream roughly 636 songs per day, leading to round 661,440 streams every day. With a median royalty charge of half a cent per stream, Smith calculated that the every day earnings would attain $3,307.20, month-to-month earnings of $99,216, and annual earnings exceeding $1.2 million.
By manipulating streaming information, Smith fraudulently collected greater than $10 million in royalty funds after his bots streamed a whole bunch of hundreds of AI-generated songs billions of occasions. In a February 2024 electronic mail, he boasted that his songs generated “over 4 billion streams and $12 million in royalties since 2019.”
“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,” mentioned U.S. Legal professional Damian Williams.
Smith now faces costs of wire fraud, wire fraud conspiracy, and cash laundering conspiracy, every carrying a most sentence of 20 years in jail.
