It ends with one Michael Smith, 54, is sentenced to 18 months in prison resident of Cornelius, North Carolina, considered the world’s first criminal prosecution of a Music streaming fraud based on AI-generated songs. In addition to the prison sentence, the court imposed the confiscation of 8 million dollars ($8,091,843.64 to be precise) and two years of probation.
We reported on this story in 2024, and then in March of this year. According to court documents, between 2017 and 2024 Smith worked together with multiple accomplices to artificially inflate plays of synthetic songs on Spotify, Amazon Music, Apple Music, and YouTube Music.
The investigation, led by the FBI, led to the indictment in September 2024 for conspiracy to wire fraud, wire fraud and money laundering conspiracy. In March this year the man pleaded guilty to a single charge, conspiracy to commit wire fraud, which carried a maximum sentence of five years: the sentence handed down is therefore significantly lower than the expected limit.
The mechanism was essentially simple: upload huge amounts of AI-generated music to platforms and have an army of automated accounts listen to it on a loop, collecting the royalties paid by the services. To avoid arousing suspicion, Smith had however avoided concentrating his listening on a few songs, distributing them across hundreds of thousands of tracks obtained from an accomplice. In this way no single piece accumulated volumes of anomalous reproductions. The songs were released under fictitious artist names, also created with AI, including Calm Baseball, Calm Connected, Calm Knuckles, Calliope Bloom, Calliope Erratum, Callous and Callous Humane.
In the phase of maximum expansion, the operation would have leveraged 52 cloud service accounts, each with 20 bot accounts, for a total of 1,040 bots. By Smith’s estimates, each account was capable of play approximately 636 songs per day, for a total of 661,440 daily plays. Connection to streaming services was via VPN. Overall, the songs would have racked up billions of plays, generating more than $8 million in fraudulent royalties.
To give an idea of the disproportionthe US Department of Justice cited a comparison to Taylor Swift’s catalog. In April 2023, the singer’s entire discography obtained 9.3 million plays on YouTube Music from accounts with family plans, while in the same month Smith’s bots, in turn exploiting family plans, recorded 80.9 million fraudulent listens to her synthetic songs: almost nine times as much.
US Attorney Jamie McDonald said: “By flooding music streaming platforms with automated bots instead of consumers and fake songs instead of creativity, Smith stole millions of dollars in royalties from genuine artists and their fans. This office is committed to ensuring the integrity of all markets and protecting the public from those who use super intelligence to commit fraud.”
