North Carolina Musician Pleads Guilty in AI Streaming Fraud Case, Agrees to Forfeit $8.09 Million
Prosecutors say the case tests how AI-made tracks with automated plays exploit royalty pools on major platforms.
Overview
- Michael Smith pleaded guilty on March 20 in the Southern District of New York to one count of conspiracy to commit wire fraud.
- He generated hundreds of thousands of AI-created tracks and deployed bot accounts to stream them billions of times on Spotify, Apple Music, Amazon Music, and YouTube Music.
- Under the plea, Smith will forfeit $8,091,843.64 and faces a maximum five-year prison term, with sentencing set for July 29, 2026.
- Charging documents state the scheme operated from 2017 to 2024, producing more than 650,000 daily streams and more than $10 million in alleged royalties.
- Federal officials describe the prosecution as one of the first major U.S. cases targeting AI-assisted streaming fraud that diverted royalties from legitimate artists and rights holders.