Musician sentenced to prison in $10 million AI streaming fraud

North Carolina musician Michael Smith was sentenced to 18 months in federal prison for a streaming royalty fraud scheme that prosecutors said brought in more than $10 million. He was also ordered to pay $8,091,843.64 in forfeiture and received two years of supervised release.

Smith, 54, pleaded guilty in March after being indicted in September 2024. Court documents say he inflated listening figures for his songs from 2017 to 2024 by uploading hundreds of thousands of AI-generated tracks to Spotify, Apple Music, Amazon Music and YouTube Music, then using automated bots to stream them billions of times. The songs had been bought from an accomplice, according to the documents.

At the scheme’s peak, Smith used more than 1,000 bot accounts. In an October 20, 2017, email, he described operating 52 cloud service accounts with 20 bot accounts each. His estimate was about 636 songs streamed per bot per day, or roughly 661,440 streams daily. At half a cent per stream, he calculated earnings of $3,307.20 a day, $99,216 a month and more than $1.2 million a year.

The U.S. Department of Justice said that in April 2023, Smith’s bot accounts generated 80.9 million fraudulent streams of his AI-generated music through family plans on YouTube Music, while Taylor Swift’s entire catalogue received 9.3 million family-plan streams there. In a February 2024 email, Smith claimed his songs had generated more than 4 billion streams and $12 million in royalties since 2019.