North Carolina Man Accused of $10M AI Music Fraud with Fake Streams
Michael Smith, 52, from Cornelius, North Carolina, has been charged with wire fraud and money laundering for allegedly running a scheme that earned him over $10 million in royalties using AI-generated music and fake streams. From 2017 to 2024, Smith created hundreds of thousands of songs with artificial intelligence and set up thousands of bot accounts on platforms like Spotify, Apple Music, Amazon Music, and YouTube Music to artificially inflate streams of his tracks.
Smith's bots were capable of generating up to 661,440 streams per day, earning around $1.2 million in annual royalties. To avoid detection, he spread these streams across thousands of songs, each with a small number of plays, rather than concentrating them on a few tracks. This approach helped him bypass anti-fraud measures on streaming platforms.
In 2018, Smith teamed up with an AI music company CEO and a music promoter who supplied him with thousands of AI-generated songs each week. Smith then uploaded these songs under fabricated artist names like “Calliope Bloom” and “Calm Innovation” to give the appearance of diverse, real creators.
Smith used fake names and information to create bot accounts, violating streaming platforms' terms and conditions. The bots streamed his music billions of times, generating royalties that should have gone to legitimate musicians and rights holders. If convicted, Smith faces up to 20 years in prison for each of the charges, including wire fraud conspiracy and money laundering conspiracy.
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