A North Carolina musician collected more than $10 million in royalties by using AI-generated tracks and automated bots to produce billions of fraudulent streams, federal prosecutors say.
Michael Smith’s scheme and methods
According to court documents, 54-year-old Michael Smith pleaded guilty in March after being indicted in September 2024 for fraudulently inflating his songs' listening statistics between 2017 and 2024. Smith uploaded hundreds of thousands of AI-generated songs that he had bought from an accomplice to major platforms, including Spotify, Apple Music, Amazon Music, and YouTube Music. He then used automated AI bots to stream those tracks billions of times.
To reduce the risk of detection by platform anti-fraud systems, Smith had the bots connect to the streaming services through virtual private networks (VPNs). Court filings show he managed large numbers of bot accounts from cloud infrastructure: on October 20, 2017, he emailed himself a financial breakdown describing 52 cloud service accounts, each hosting 20 bot accounts.
Scale: bot accounts, streams, and money
The documented calculations offer a granular picture of the operation's scale. At Smith's reported estimates, each bot could stream roughly 636 songs per day, producing an estimated 661,440 streams per day across his infrastructure. At an average royalty rate of half a cent per stream, those numbers translated in his calculations to daily earnings of $3,307.20, monthly earnings of $99,216, and annual earnings exceeding $1.2 million.
Smith later boasted in a February 2024 email that the songs had generated “over 4 billion streams and $12 million in royalties since 2019.” Prosecutors attribute more than $10 million in collected royalties to the scheme and say it reached a peak in which Smith used more than 1,000 bot accounts to inflate plays.
The Department of Justice highlighted the disparity between legitimate usage and the fraud: “For example, in April 2023, the entire catalogue of Taylor Swift received 9.3 million streams on YouTube Music from family plan streams, while in the same month, Smith's Bot Accounts used family plans to fraudulently stream his AI-generated music 80.9 million times,” the DOJ added.
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Court records name several third parties who assisted Smith. The prosecution says the Chief Executive Officer of an AI music company and an unnamed music promoter helped facilitate the uploads and distribution of the AI-created songs. Smith purchased hundreds of thousands of songs from an accomplice and used those tracks as the content the bots would play.
In an October 4, 2018 email to accomplices, Smith urged a faster pace of uploads: “we need to get a TON of songs fast to make this work around the anti fraud policies these guys are all using now,” adding that they needed “a TON of content with small amounts of Streams” to avoid alerting “the powers that be.”
Sentencing, forfeiture, and supervised release
Smith was sentenced to 18 months in federal prison and ordered to pay $8,091,843.64 in forfeiture. In addition to the prison term, the sentence includes two years of supervised release. U.S. Attorney Jamie McDonald summarized the harm in court filings: “By flooding music streaming platforms with automated bots in the place of consumers, and fake songs in the place of creativity, Smith robbed millions in royalty payments from genuine artists and their fans.”
What this means for streaming platforms, artists, and law enforcement
- Streaming platforms: The case underscores the vulnerabilities platforms face when automated accounts and VPNs are used to spoof legitimate listening behavior; platforms will need to continue refining bot detection and account verification to protect royalty flows.
- Recorded artists and rights holders: The prosecution’s claim that millions in royalties were diverted highlights a direct financial threat to genuine creators who rely on streaming income and to the accuracy of platform analytics used for business decisions.
- Law enforcement and prosecutors: The investigation demonstrates a mix of digital forensics (tracking account structures, emails, and cloud usage) and financial analysis (royalty calculations and forfeiture amounts) that prosecutors can deploy against large-scale streaming fraud.
The record in this case is specific: detailed emails documenting account structures and streaming estimates, purchases of AI-generated songs, and an explicit effort to evade anti-fraud measures. The federal penalties—prison time, a multi-million-dollar forfeiture, and supervised release—reflect prosecutors’ view that the scheme produced sustained, calculated harm to artists, services, and consumers. As platforms and creators review the fallout, the documents filed in this case provide a clear example of how AI tools, cloud services, and automation can be combined to monetize illicit behavior at scale.
Source: BleepingComputer — Musician sent to prison for $10 million streaming fraud using AI bots
