NC man pleads guilty in $8 million AI music streaming fraud scheme
NEW YORK (WWAY) — A North Carolina man has pleaded guilty to a federal charge tied to a scheme that used artificial intelligence and automated bots to fraudulently generate millions in music streaming royalties.
U.S. Attorney for the Southern District of New York announced that Michael Smith, 54, of Cornelius, pleaded guilty to conspiracy to commit wire fraud.
Prosecutors say Smith created hundreds of thousands of songs using artificial intelligence and then used automated programs, known as bots, to stream the tracks billions of times across major platforms, including Amazon Music, Apple Music, Spotify and YouTube Music.
Authorities say the scheme allowed Smith to collect more than $8 million in royalties by mimicking legitimate streaming activity, diverting payments away from actual artists and rights holders.
According to court documents, Smith created thousands of accounts on streaming platforms and used software to repeatedly play songs he owned. He also spread the streams across a large number of tracks to avoid detection.
To generate enough content for the operation, prosecutors say Smith used artificial intelligence to create a vast catalog of music that could be streamed by the automated accounts.
“Although the songs and listeners were fake, the millions of dollars Smith stole was real,” US Attorney Jay Clayton said in a statement, adding that the scheme diverted money from legitimate musicians.
Smith faces a maximum sentence of five years in prison. He has also agreed to forfeit more than $8 million.
Sentencing is scheduled for July 29, 2026.
