A North Carolina man has pleaded guilty to one of the most brazen streaming fraud cases ever prosecuted, using AI-generated artists and bot-driven fake listeners to steal more than $8 million in royalties that belonged to real musicians and songwriters.
Michael Smith, 54, of Cornelius, North Carolina, entered his guilty plea before U.S. District Judge John G. Koeltl in the Southern District of New York, admitting to a single count of conspiracy to commit wire fraud. He faces up to five years in federal prison. Sentencing is scheduled for 07/29/2026, and Smith has agreed to forfeit $8,091,843.64 in full.
The scheme was methodical. Smith used AI to generate hundreds of thousands of songs under fake artist identities, then built out thousands of bot accounts across Amazon Music, Apple Music, Spotify, and YouTube Music — the platforms explicitly named in the U.S. Attorney’s Office press release — and set those bots to stream his catalogue on a continuous, automated loop. To stay below the fraud-detection threshold, he deliberately spread artificial plays across his enormous library rather than hammering any single track. The result was billions of streams that looked, on paper, like genuine consumer activity.
It’s a particularly corrosive form of theft. Streaming royalties are distributed proportionally from a shared pool, which means every fake play Smith manufactured came directly out of what real artists were owed. His bot traffic not only generated money for him, but actively drained it from everyone else.
U.S. Attorney Jay Clayton put it plainly: “Michael Smith generated thousands of fake songs using artificial intelligence and then streamed those fake songs billions of times. Although the songs and listeners were fake, the millions of dollars Smith stole were real. Millions of dollars in royalties that Smith diverted from real, deserving artists and rights holders. Smith‘s brazen scheme is over, as he stands convicted of a federal crime for his AI-assisted fraud.”
The case was investigated by the FBI and prosecuted by the SDNY’s Complex Frauds and Cybercrime Unit.
What it leaves unanswered is the larger question that Metal Injection raised: how does a scheme of this scale — hundreds of thousands of fake songs, billions of fraudulent streams — run long enough to generate over $8 million before anyone catches it? The platforms named in the indictment have the technical infrastructure to detect anomalous streaming behaviour, and the financial incentive to do so. Whether Smith‘s conviction prompts any of them to actually strengthen those safeguards, or whether this gets filed away as an isolated incident, remains to be seen. Real artists shouldn’t have to wait for the next Michael Smith to find out.
The post North Carolina Man Stole $8M From Real Artists Using Hundreds Of Thousands Of AI Songs & Billions Of Fake Streams appeared first on Sonic Perspectives.
