A North Carolina man admitted in a Manhattan federal court today that he used a massive army of bots and artificial intelligence to siphon millions of dollars from the music industry. Michael Smith, 54, of Cornelius, North Carolina, pleaded guilty to conspiracy to commit wire fraud before U.S. District Judge John G. Koeltl, marking the end of a high-tech scheme that generated billions of fraudulent streams.
According to prosecutors from the Southern District of New York, Smith’s operation was a numbers game designed to fly under the radar of major platforms like Spotify, Apple Music, and YouTube Music.
To avoid triggering fraud alerts with a single hit song, Smith utilized AI to churn out hundreds of thousands of tracks. He then deployed “bot accounts”—automated programs that mimic real listeners—to play those songs around the clock.
The scale of the deception was massive. By spreading the fake listens across an enormous library of AI-generated content, Smith successfully claimed more than $8 million in royalty payments.
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These funds were drawn from the same pools used to pay legitimate songwriters and performers, effectively diverting money away from real artists whose music was being streamed by actual human beings.
“Michael Smith generated thousands of fake songs using artificial intelligence and then streamed those fake songs billions of times,” said U.S. Attorney Jay Clayton. “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.”
The mechanics of the fraud relied on the way streaming services distribute money. Because platforms pay out royalties proportionately based on total stream counts, Smith’s billion-count bot activity allowed him to claim a significant slice of the industry’s revenue.
As part of his plea deal, Smith has agreed to forfeit $8,091,843.64. While the conspiracy charge carries a maximum potential sentence of five years in federal prison, his final sentence will be determined by the judge.
The investigation was led by the FBI, whose work was praised by the U.S. Attorney’s office following the court proceedings. Smith is currently scheduled to be sentenced by Judge Koeltl on July 29, 2026.
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