Musician charged with music streaming fraud using AI

Michael Smith, a 52 year old musician from Cornelius, North Carolina, is being charged with manipulating streaming data to collect millions of dollars in royalty payments.

According to the indictment, Smith orchestrated a scheme to steal millions of dollars in musical royalties by fraudulently inflating music streams on digital streaming platforms, such as Amazon Music, Apple Music, Spotify and YouTube Music.

From two co-conspirators, an AI music company and a music producer, Smith purchased hundreds of thousands of songs that were created using artificial intelligence (AI) and uploaded these songs to the music streaming platforms. He then used automated programs or ‘bots’ to stream the songs billions of times.

“At the height of his fraudulent scheme, Smith used over a thousand bot accounts simultaneously to artificially boost streams of his music across the streaming platforms. By manipulating the streaming data in this manner, Smith fraudulently obtained more than $ 10 million in royalty payments to which he was not entitled,” the indictment says.

The bot accounts could play 636 songs, or 661,440 streams per day, generating annual royalties of $ 1,207,128.

The suspect knew that if a single song was streamed one billion times a day, it would raise suspicions at the streaming platforms. However, a billion streams per day divided over tens of thousands of songs would be more difficult to detect.

According to the Department of Justice, Smith repeatedly lied to the music streaming platforms when he used false names and other information to create bot accounts. He also deceived the platforms by pretending the bot accounts were in control of legitimate users, but were in fact programmed to stream Smith’s music billions of times.

Smith is being charged with wire fraud conspiracy, wire fraud and money laundering conspiracy, each of which carries a maximum sentence of twenty years in prison.