Federal authorities hit a North Carolina man with charges arising from allegations that he fraudulently earned streaming royalties through a scheme involving bots and AI-generated songs.
The man, identified by the U.S. Attorney’s Office for the Southern District of New York as Michael Smith, faces wire fraud conspiracy, wire fraud and money laundering conspiracy counts.
His indictment was unsealed this week, according to a news release from the U.S. Attorney's Office.
North Carolina man Michael Smith "eventually turned to artificial intelligence" to obtain the necessary number of songs for his scheme to fraudulently earn streaming royalties to succeed, prosecutors allege. (Reuters/Dado Ruvic/Illustration/File Photo / Reuters Photos)
Authorities allege Smith set up "thousands" of "Bot Accounts" on streaming platforms and automated them to "continuously stream songs that he owned" to generate royalties for him to pocket.
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He "eventually turned to artificial intelligence" to "obtain the necessary number of songs for his scheme to succeed," the attorney’s office alleged.
The AI-generated songs, obtained through an AI music company CEO and a music promoter, bore song and artist names that Smith purportedly "randomly generated" to give the false impression they had been made by actual musicians, according to the attorney’s office.
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The attorney’s office alleged the royalties that Smith raked in from his "Bot Accounts" streaming "hundreds of thousands" of his AI-generated songs "billions of times" amounted to over $10 million.
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The platforms that he is accused of conducting his scheme on included Amazon Music, Apple Music, Spotify and YouTube Music, according to the attorney’s office.
Spotify is among the platforms that Michael Smith is accused of conducting his scheme on, according to the attorney’s office. (Nikos Pekiaridis/NurPhoto via Getty Images / Getty Images)
Smith also faces allegations of "numerous misrepresentations" to the streaming platforms.
"The defendant’s alleged scheme played upon the integrity of the music industry by a concerted attempt to circumvent the streaming platforms’ policies," FBI Acting Director Christie Curtis claimed.
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Each of the three charges have up to 20 years of jail time associated with them.
"The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless proven guilty," the press release from the attorney’s office said.
