Michael Smith, 54, of Cornelius, North Carolina, has pleaded guilty in federal court to running a scheme that exploited music streaming platforms and diverted royalty payments from artists. He admitted to one count of conspiracy to commit wire fraud, which carries a maximum sentence of five years in prison, and agreed to forfeit $8,091,843.64.
According to U.S. Attorney for the Southern District of New York Jay Clayton, Smith used AI to generate hundreds of thousands of songs and deployed automated programs to stream them billions of times, inflating play counts.
Court filings state the scheme ran from 2017 through 2024. Smith uploaded large volumes of AI-generated tracks and used automated accounts to generate streams at scale. At points, the operation relied on thousands of bot accounts running at once, redirecting royalty payments from artists and rights holders.
The indictment describes a system built around fake user accounts, bulk email registrations, and scripted playback running on cloud infrastructure. Smith used these accounts to stream his own catalog continuously, generating revenue tied to play counts. He also spread activity across a large number of tracks to limit detection and keep per-song streams low.
Prosecutors said Smith obtained more than $10 million in royalties through the scheme. Payments that should have been distributed to songwriters, performers, and other rights holders were redirected through manipulated streaming data.
“Michael Smith generated thousands of fake songs using artificial intelligence and then streamed those fake songs billions of times,” Clayton said. “Although the songs and listeners were fake, the millions of dollars Smith stole was real. Millions of dollars in royalties that Smith diverted from real, deserving artists and rights holders. Smith’s brazen scheme is over, as he stands convicted of a federal crime for his AI-assisted fraud.”
The final penalty will be determined by the court.
