What just happened? In what appears to be a devious use of generative AI and bots, a man has been accused of conning music services out of $12 million by uploading AI-generated music tracks and using an army of over 1,000 bots to repeatedly stream them. Unfortunately for the man in question, he's been arrested for his actions and faces a maximum sentence of 20 years in prison.
Between 2017 and 2024, 52-year-old Michael Smith of Cornelius, North Carolina, and his co-conspirators fraudulently increased the number of streams his AI-generated tracks received on platforms including Spotify, Amazon Music, Apple Music, and YouTube, states court documents (via BleepingComputer).
Rather than risk attracting attention by streaming a small number of tracks millions of times using bots, he acquired hundreds of thousands of AI songs from a co-conspirator and streamed them a relatively small number of times.
The tracks used AI-generated artist names such as Calm Baseball, Calm Connected, Calm Knuckles, Calliope Bloom, Calliope Erratum, Callous, and Callous Humane.
"In order to not raise any issues with the powers that be we need a TON of content with small amounts of Streams," Smith wrote in emails to his co-conspirators: an unnamed music promoter and the Chief Executive Officer of an AI music company. "We need to get a TON of songs fast to make this work around the anti-fraud policies these guys are all using now."
At its peak, Smith's operation consisted of 52 cloud service accounts, each with 20 bot accounts, totaling 1,040 bots. He estimated that each account could stream around 636 songs daily, accessing the platforms via VPNs, resulting in 661,440 streams every day. At a royalty rate of half a cent per stream, he worked out payments at $3,307 daily, $99,216 monthly, and more than $1.2 million annually.
In an email he wrote in February 2024, Smith claimed that his songs had generated over 4 billion streams and $12 million in royalties since 2019.
"Through his brazen fraud scheme, Smith stole millions in royalties that should have been paid to musicians, songwriters, and other rights holders whose songs were legitimately streamed," said U.S. Attorney Damian Williams.
Smith is being charged with wire fraud conspiracy, wire fraud, and money laundering conspiracy, each of which carries a maximum prison sentence of 20 years.
Smith will soon have a hearing in front of a Magistrate Judge in North Carolina. There's no word on when his trial might take place.
