A North Carolina man is facing fraud charges after prosecutors said he used artificial intelligence to create songs, then used “bots” to stream the songs billions of times and raked in over $10 million in royalties.
According to the indictment, 52-year-old Michael Smith of Cornelius is accused of creating thousands of accounts on music streaming platforms like Spotify and Apple Music beginning in 2017 to be able to stream songs he owned.
He allegedly used software to continuously stream the songs, calculating that he could generate approximately 661,440 streams per day and yield annual royalties of $1,207,128.
Court documents state Smith spread his automated streams across thousands of songs to avoid streaming any one song excessively, which would have raised suspicions at the streaming platform companies.
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Smith allegedly decided he needed more songs to spread the streams and make it more difficult to detect. That’s when prosecutors said he emailed two co-conspirators and said, “We need to get a TON of songs fast to make this work around the anti-fraud policies these guys are all using now.”
Around 2018, Smith allegedly began working with the CEO of an AI music company and a music promoter to create hundreds of thousands of songs using artificial intelligence that he could upload to various streaming platforms.
Court documents state that he randomly generated song and artist names for the AI-created music to make them appear more legitimate.
Bot accounts allegedly created by Smith were hard-coded to stream the AI-created songs billions of times, ultimately generating more than $10 million in royalties.
The U.S. Attorney’s Office in the Southern District of New York claimed Smith deceived the streaming platforms by repeatedly using false names to make accounts, agreeing to abide by the platforms’ terms and conditions and making it appear that legitimate users were in control of the bot accounts and streaming music when in actuality it was software coded to stream the music.
He’s been charged with wire fraud conspiracy, wire fraud and money laundering conspiracy – all of which carry a maximum sentence of 20 years in prison.
