AI Music Scammer Charged in $10 Million Streaming Fraud Scheme Through Bot Accounts
A North Carolina musician faces criminal charges for allegedly orchestrating a $10 million streaming fraud scheme using AI-generated music tracks across major platforms including Spotify, Apple Music, Amazon Music, and YouTube Music.
The scheme, running from 2017 to 2024, involved collaboration with an AI music company that generated thousands of tracks. The defendant, Michael Smith, allegedly created numerous bot accounts through Family plans to artificially inflate streaming numbers.
AI fraud indictment legal document
Key details of the alleged fraud:
- Created over 1,040 bot accounts across 52 cloud services
- Each bot could stream approximately 636 songs daily
- Generated an estimated $3,307.20 in daily royalties
- Transferred $1.3 million to personal bank accounts between 2020-2023
- Used corporate debit cards registered under fake employee names to pay for streaming subscriptions
The scheme extended beyond recording royalties to include compositional royalties, which eventually prompted the Mechanical Licensing Collective to halt payments in early 2023. While creating AI music itself isn't illegal, Smith faces charges of wire fraud and money laundering conspiracy.
Blurred businessman in dark suit
The case marks the first criminal prosecution involving artificially inflated music streaming, highlighting growing concerns about streaming fraud in the music industry. Smith has pleaded not guilty and faces $500,000 bail as the case proceeds.
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