Photo Credit: Sasun Bughdaryan
Michael Smith, the North Carolina man convicted of stealing over $8 million in streaming royalties, has been sentenced to 18 months in prison.
The U.S. Attorney for the Southern District of New York, Jamie McDonald, has announced that Michael Smith was sentenced to 18 months in prison. The North Carolina man was convicted of defrauding music streaming platforms and musicians of over $8 million in royalties with the assistance of artificial intelligence and a network of bots. He pleaded guilty to one count of conspiracy to commit wire fraud back in March.
“Michael Smith exploited superintelligence technology to generate a fraud,” said U.S. Attorney Jamie McDonald. “By flooding music streaming platforms with automated bots in the place of consumers and fake songs in the place of creativity, Smith robbed millions in royalty payments 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 superintelligence for fraud.”
Smith’s streaming fraud consisted of three steps: creating thousands of fraudulent accounts on streaming platforms, using software to enable the bot accounts to stream his AI-generated songs continuously, and collecting royalties based on those fraudulent streams. His scheme took place from 2017 to 2024.
To illustrate the sheer level of fraud committed, in April 2023, Taylor Swift’s entire catalog received 9.3 million streams on YouTube Music from family plan streams—but during that same month, Smith’s bot accounts used family plans to generate 80.9 million streams of his AI-generated music. He was able to obtain more than $8 million in royalties from streaming platforms as a result.
No sooner had Smith received his sentence than industry bodies began releasing statements regarding the landmark ruling, including the RIAA and MFFA.
“Streaming fraud harms creators and deceives fans. We appreciate the Court recognizing the significance of this harmful conduct and the ill-gotten gains that come from the pockets of real artists, songwriters, and their label partners,” said an RIAA spokesperson in a statement to Digital Music News.
“Michael Smith undermined trust in the music industry and stole $8 million from artists and songwriters. He was prosecuted, convicted, and now sentenced,” said Michael Lewan, Executive Director of the Music Fights Fraud Alliance (MFFA). “We thank the U.S. Attorney’s Office for the Southern District of New York and the FBI for their work on this case. But the industry’s fight against fraud is about more than one case. To truly protect creators, industry stakeholders, law enforcement, and policymakers must keep working together to deliver continued, meaningful deterrence.”
The 54-year-old Smith was also sentenced to two years of supervised release and ordered to forfeit $8,091,843.64 in restitution, in addition to his prison sentence. Michael Smith is the first in the country to be handed a federal sentence for music streaming fraud.
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