Michael Smith [1] [2] [3] [4] [5] [6] [7] [8], a 52-year-old musician from Cornelius, North Carolina [1] [2] [3] [5] [8], has been charged with wire fraud conspiracy [3] [8], wire fraud [1] [2] [3] [6] [7] [8], and money laundering conspiracy for orchestrating a $10 million streaming music scam involving AI-generated songs.
Description
Smith collaborated with an AI music company CEO and a music promoter to create hundreds of thousands of AI-generated tracks, which he used to manipulate streaming platforms like Spotify, Apple Music [1] [2] [3] [5] [7] [8], and YouTube Music [2] [3] [5] [7] [8]. By operating a network of around 10,000 bot accounts, Smith was able to generate over 661,440 streams per day, earning approximately $1.2 million in annual royalties [8]. Despite the nonsensical nature of some of the AI-generated songs [8], they received a significant number of streams due to Smith’s manipulation. Prosecutors revealed that Smith created randomly generated song and artist names to make the music appear legitimate [2]. The indictment against Smith carries a maximum sentence of 20 years in prison for each charge.
Conclusion
This case sheds light on the concerns within the music industry regarding the use of AI tools in music creation and its potential impact on the value of human creativity. If convicted [1], Smith could face up to 20 years in prison on each of the three fraud counts [1], with the scam reportedly generating over 600,000 streams per day at its peak [1], resulting in Smith collecting $1.2 million a year and over $10 million in fraudulent royalties over the course of the scheme [1]. Smith is accused of buying AI-generated music [6], posting it on streaming platforms [6], and then using thousands of bots to stream his posts [6], allowing him to generate significant revenue [6]. The AI music-generation technology used by Smith improved over time [4], making it harder for music streaming companies to detect the fraudulent activity [4]. Authorities claim Smith earned over $10 million in royalties from streaming his AI-generated songs billions of times [3]. The FBI has accused Smith of attempting to circumvent streaming platforms’ policies and each charge carries up to 20 years of jail time [3].
References
[1] https://www.scmagazine.com/news/man-used-ai-to-bilk-10-million-plus-from-music-streaming-services
[2] https://www.forbes.com/sites/lesliekatz/2024/09/08/man-charged-with-10-million-streaming-scam-using-ai-generated-songs/
[3] https://www.aol.com/finance/man-charged-using-bots-stream-213944473.html
[4] https://www.silicon.co.uk/e-innovation/artificial-intelligence/ai-fraud-music-arrest-578632
[5] https://www.infosecurity-magazine.com/news/man-charged-ai-fake-music-scheme/
[6] https://www.yahoo.com/news/musician-charged-wire-fraud-using-165455105.html
[7] https://the-decoder.com/us-musician-charged-with-streaming-fraud-using-ai-generated-songs/
[8] https://decrypt.co/248161/music-for-bots-doj-fake-ai-songs-streaming
