A Manhattan federal court sentenced 54-year-old Michael Smith to 18 months in prison for a streaming fraud scheme involving AI-generated music. This marks the first criminal conviction for such activity in the United States.
Between 2017 and 2024, Smith used thousands of fake accounts on platforms like Spotify, Apple Music, and Amazon Music to stream his tracks. He utilized AI to generate hundreds of thousands of songs and deployed up to 10,000 bots simultaneously to inflate play counts.
Prosecutors stated the scheme generated $8 million in illicit royalties. Smith pleaded guilty to conspiracy to commit wire fraud in March 2024. As part of the court ruling, he is ordered to forfeit $8.09 million and will serve two years of supervised release after his prison term.
The fraudulent activity diverted royalties from legitimate artists, as streaming platforms distribute payouts from a shared pool based on total play share. The prosecution had initially sought a 46-month sentence, while the defense requested no prison time.
