AI Streaming Fraud Lands Musician in Prison Over $8 Million Scheme

A North Carolina musician will serve 18 months in federal prison after using automated accounts to collect millions in music royalties. The AI streaming fraud scheme combined artificial listening activity with a vast catalogue of AI-generated tracks.

Michael Smith, 54, ran the operation between 2017 and 2024 across Spotify, Apple Music, Amazon Music and YouTube Music. He pleaded guilty in March 2026 to conspiracy to commit wire fraud.

In addition to prison, Smith received two years of supervised release. The court also ordered him to forfeit $8,091,843.64.

Automated Accounts Turned Fake Listens Into Royalties

Smith used software to make fraudulent accounts repeatedly play songs under his control. As a result, streaming platforms paid royalties for activity that did not reflect genuine audience demand.

At times, the operation involved as many as 10,000 bot accounts running simultaneously.

Meanwhile, Smith used virtual private networks to conceal the activity. His operation ultimately generated billions of artificial streams across hundreds of thousands of AI-generated songs.

A Larger Catalogue Helped Conceal the Activity

Rather than directing every automated listen toward a handful of tracks, Smith spread streams across an enormous music catalogue. This approach helped him avoid suspicious spikes around individual songs.

An October 2018 email revealed the reasoning behind that strategy. Smith told accomplices they needed substantially more songs to work around platforms’ fraud controls.

Consequently, the catalogue’s size served a practical purpose: each track could attract fewer fake listens while the overall operation continued generating revenue.

Emails Revealed the Scale of the Operation

Smith’s earlier calculations showed how profitable automated listening could become. In October 2017, he described operating 52 cloud accounts, each supporting 20 bot accounts.

He estimated that this setup could produce approximately 661,440 daily streams. Based on his assumed royalty rate, that would generate around $3,307 per day.

Later, in February 2024, Smith claimed in an email that the music had earned $12 million from over four billion streams since 2019. That figure represents his own claim, rather than the royalty total stated in the sentencing announcement.

The AI streaming fraud case shows how synthetic music and automated listening can work together to manipulate royalty payments on a massive scale.