A North Carolina man has pleaded guilty after federal prosecutors say he used artificial intelligence and bot accounts to generate millions of dollars in fake music streaming royalties.
According to the Charlotte Observer, 54-year-old Michael Smith admitted to one count of conspiracy to commit wire fraud. The U.S. Attorney’s Office for the Southern District of New York confirmed that Smith agreed to forfeit more than $8 million as part of his plea. He now faces a maximum sentence of five years in federal prison.
How the Scheme Worked
Prosecutors say that from 2017 to 2024, Smith used artificial intelligence to generate thousands of songs.
He then allegedly created bot accounts to stream those songs billions of times across multiple streaming platforms. Rather than funneling streams into one hit song, which would raise suspicion, Smith reportedly spread the plays across thousands of tracks. That strategy helped him avoid detection.
Authorities say he generated approximately 661,400 streams per day. Over time, those numbers translated into more than $1.2 million in royalty payments.
Cloud Accounts and Self-Documentation
Investigators say Smith maintained 52 cloud service accounts and 20 bot accounts across streaming platforms.
According to prosecutors, he even emailed himself detailed breakdowns of operational costs tied to the scheme.
That documentation became part of the government’s case.
Federal officials say the scale of the operation relied on automation, cloud computing, and AI-generated music to create the appearance of legitimate listener activity. Smith’s sentencing is scheduled for July 29.