A 54-year-old man has been sentenced to 18 months in prison after using artificial intelligence to create thousands of songs and deploying bots to stream them billions of times in a scheme that generated more than $8m in music royalties.
Michael Smith, who pleaded guilty in March to wire fraud conspiracy, was sentenced on Tuesday at a federal court in Manhattan. Judge John G. Koeltl also ordered him to serve two years of supervised release.
Smith’s case is the first criminal prosecution resulting in a conviction for large-scale streaming fraud involving AI-generated music, highlighting growing concerns over the use of artificial intelligence and automated systems to manipulate music platforms.
Prosecutors said Smith began his scheme in 2017 by using thousands of bots to repeatedly play songs on Spotify, Apple Music and other streaming services. He initially used the system to increase streams for his own music before expanding the operation by producing large volumes of AI-generated songs.
The automated streams allowed him to collect royalties that would ordinarily have been distributed among legitimate artists and songwriters.
Jamie McDonald, a Manhattan federal prosecutor, said Smith had taken advantage of emerging technology to carry out the fraud on an extensive scale.
“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.”
Smith was arrested in 2024 after prosecutors filed a three-count indictment against him. In March, he pleaded guilty to one count of wire fraud conspiracy and agreed to forfeit more than $8m obtained through the scheme.
The offence carries a maximum sentence of five years. Federal sentencing guidelines recommended between 46 and 57 months, while probation officials had proposed a 24-month sentence.
Before the sentencing, however, Smith’s lawyers asked the court to spare him prison time. They argued that the financial impact on individual artists was minimal because the alleged losses were spread across millions of creators.
“The effect each individual stream of one artist’s song has on every other artist’s share of total streams is not akin to a drop in a proverbial bucket — it is a drop in an ocean,” Smith’s lawyers wrote.
They also argued that the harm caused to any particular artist was “insignificant” and that “no victim suffered any real harm.”
Prosecutors rejected that argument and maintained that the scheme had affected numerous songwriters and artists, many of whom already earn relatively small amounts from streaming.
They urged the judge to impose at least 46 months in prison, warning that a lighter punishment could encourage others to manipulate streaming platforms.
“A lenient sentence will send precisely the wrong message: streaming fraud will not result in meaningful punishment.”
Streaming fraud has been a longstanding problem in the music business, with criminals using artificial streams to increase the apparent popularity of songs and redirect royalty payments.
The emergence of AI has added another layer to the problem by making it easier to produce large numbers of songs while also providing technology that can be combined with automated streaming networks.
Bots can also be used to inflate the streaming numbers of genuine musicians. Such allegations featured in Drake’s legal dispute with Universal Music Group over Kendrick Lamar’s “Not Like Us”.
However, industry advocates say a more damaging form of fraud involves individuals creating fake or copied music specifically to generate royalties. Such activity can reduce the share of streaming revenue available to legitimate artists and songwriters.
The Recording Industry Association of America welcomed Smith’s sentence, saying it demonstrated the seriousness of manipulating streaming systems for financial gain.
“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.”
The Music Fights Fraud Alliance, an advocacy organisation established in 2023, also praised the ruling but cautioned that a single prosecution would not be enough to eliminate streaming manipulation.
The group said Smith had “undermined trust in the music industry” and called for continued cooperation between the music industry, law enforcement and policymakers.
“To truly protect creators, industry stakeholders, law enforcement, and policymakers must keep working together to deliver continued, meaningful deterrence.”
