A North Carolina man has been sentenced to 18 months in prison for using sophisticated AI technology to defraud music streaming platforms. According to reports from Forbes, Michael Smith, 54, pleaded guilty in March to conspiracy to commit wire fraud. A US District Judge John G. Koeltl imposed the sentence, followed by two years of supervised release. Smith was also ordered to forfeit $8,091,843.64 as part of the criminal proceedings. The sentencing took place on Tuesday, October 6 in Manhattan federal court, marking the conclusion of what prosecutors described as the Justice Department's first criminal case involving AI-assisted music streaming fraud. As reported by the DOJ, this represents the first US federal AI-assisted music streaming fraud sentence in the country's history. U.S. Attorney Jamie McDonald emphasized that Smith "exploited superintelligence technology to generate a fraud," stating that by flooding music streaming platforms with automated bots and fake songs, Smith "robbed millions in royalty payments from genuine artists and their fans."
Smith's fraudulent scheme operated from 2017 through 2024 using a systematic three-step process to defraud major streaming platforms. As reported by the US Attorney's Office for the Southern District of New York, Smith's operation created thousands of fraudulent accounts on streaming platforms, used software to enable bot accounts to stream his AI-generated songs continuously, and collected royalties based on those fraudulent streams. The scheme specifically targeted Amazon Music, Apple Music, Spotify and YouTube Music platforms, representing what US prosecutors described as the Justice Department's first criminal case involving AI-assisted music streaming fraud. According to Forbes, Smith admitted to using AI to generate thousands of songs and then streaming them billions of times with bots, earning him more than $8 million in royalties. The DOJ confirmed that Smith ran thousands of bot accounts that streamed hundreds of thousands of AI-generated songs across major streaming platforms during this period. In April 2023, Smith's bots generated 80.9 million streams for his AI music on YouTube Music, while Taylor Swift's entire catalog received 9.3 million streams that same month, highlighting the scale of his operation. At times, as many as 10,000 bot accounts were operating simultaneously, with Smith using fake email accounts and fraudulently obtained debit cards to create them.
Smith's legal team had argued for no prison time ahead of sentencing, contending that the harm to any single artist was 'insignificant' and 'no victim suffered any real harm'. However, Judge John G. Koeltl rejected this defense, ordering Smith to serve 18 months in prison followed by two years of supervised release. The case represents a significant enforcement action against AI-generated content fraud in the music streaming industry, highlighting the growing challenges posed by automated content creation and distribution systems. The $8,091,843.64 in restitution ordered reflects the substantial financial impact of Smith's fraudulent activities on legitimate music creators and streaming platforms. Industry bodies have responded swiftly to the landmark ruling, with the RIAA and MFFA releasing statements regarding the significance of this case for protecting the integrity of music markets and ensuring fair compensation for genuine artists. The Recording Industry Association of America stated that "streaming fraud harms creators and deceives fans," while the IFPI warned that generative AI makes large-scale fraud faster and cheaper, as streaming platforms now face distinguishing legitimate AI-assisted music from artificial audiences. The Music Fights Fraud Alliance (MFFA) argued in court that "the sentence the Court imposes will serve as the first real signal to the public regarding the actual legal consequences of streaming fraud," with prosecutors noting that a lenient sentence would send the wrong message about the seriousness of such fraudulent activities.
The Smith case highlights a growing problem for streaming platforms as generative AI has industrialized artificial content and artificial listening, making large-scale fraud cheaper and faster while potentially making it harder to detect. According to the IFPI's 2026 Global Music Report, Deezer reported receiving more than 60,000 fully AI-generated tracks every day in January 2026, while stating that up to 85% of streams on AI-generated music on its service were fraudulent in 2025. The IFPI has called for stronger identity verification, content vetting, detection systems, and information-sharing between streaming platforms and distributors to address this crisis. The criminal conduct centered on creating false accounts and artificial listening activity to obtain royalty payments, distinguishing it from disputes over whether AI-generated music should be allowed on streaming services. Streaming royalties are distributed from a pool of money, meaning artificial listening can alter how that pool is allocated among rights holders, making the Smith case different from disputes over AI-generated music legitimacy.
