North Carolina Man Pleads Guilty in Massive AI‑Driven Music Streaming Fraud Scheme

Source: U.S. Department of Justice — justice.gov

A North Carolina man has admitted to orchestrating one of the most brazen music‑streaming fraud operations ever uncovered — a scheme powered by artificial intelligence and automated bot networks that siphoned millions away from real artists.

Federal prosecutors announced that Michael Smith, 54, pleaded guilty to conspiracy to commit wire fraud after creating an enormous catalog of AI‑generated songs and using thousands of fake accounts to stream them billions of times. The operation was designed to mimic legitimate listener activity across major platforms including Spotify, Apple Music, Amazon Music, and YouTube Music.

According to court filings, Smith used AI tools to mass‑produce hundreds of thousands of tracks, then deployed automated “bot” accounts to stream his own music around the clock. By spreading the activity across a huge volume of songs, he avoided triggering fraud‑detection systems that typically flag abnormal streaming spikes.

The result: more than $8 million in stolen royalty payouts, diverted from real musicians and rights holders who rely on legitimate streams for income.

U.S. Attorney Jay Clayton emphasized the scale of the deception, noting that while the songs and listeners were fake, “the millions of dollars Smith stole was real.” Prosecutors say the scheme exploited the royalty‑pool model, where fraudulent streams directly reduce earnings for genuine artists.

Smith has agreed to forfeit $8,091,843.64 and faces a maximum sentence of five years in federal prison. His sentencing is scheduled for July 29, 2026, before U.S. District Judge John G. Koeltl.

The case was investigated by the FBI and prosecuted by the Southern District of New York’s Complex Frauds and Cybercrime Unit.