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Michael Smith gets 18-month sentence for AI streaming fraud scheme
In October 2026, federal prosecutors in the United States secured an 18-month prison sentence and an $8.09 million asset forfeiture against 54-year-old Michael Smith of North Carolina for operating a massive AI streaming fraud scheme that manipulated digital music platforms using thousands of automated bots.
Smith Used Bots to Stream AI Songs
He used fake email addresses and stolen debit cards to register thousands of accounts across major streaming platforms including Amazon Music, Apple Music, Spotify, and YouTube Music. As detailed in the sources, Smith deployed 52 cloud service accounts running 20 bot accounts each—totaling 1,040 automated bots connected through VPN networks—to continuously stream songs he generated using artificial intelligence. The skema ini dimulai sejak 2017.
When federal agents arrested him in 2024, Smith had produced hundreds of thousands of AI-generated tracks under fictional artist names such as Calm Baseball, Calm Connected, Calliope Bloom, and Callous Humane. To evade platform anti-fraud filters that monitor for sudden spikes in listening volume, Smith programmed his bots to spread billions of automated streams across his massive catalog of fake tracks. Each bot was configured to play roughly 636 songs daily, pushing more than 661,000 daily streams across the network without triggering platform anomalies.
The YouTube Music Stream Comparison with Taylor Swift
The scale of the artificial manipulation emerged clearly in platform usage data highlighted by prosecutors. During that exact month on the same platform, the entire catalog of Taylor Swift garnered just 9.3 million streams—amounting to less than one-eighth of the total volume generated by Smith’s automated software.
While Smith’s artificial tracks accumulated billions of total streams, platform safeguards mitigated some of the financial impact. CNBC Indonesia noted that Spotify stated its internal security measures successfully limited the royalty payouts collected by Smith’s operation on its platform to approximately $60,000.
Smith Pleaded Guilty to Fraud and Money Laundering
Court documents established that Smith collected millions of dollars in total royalties from various music royalty distribution entities over the course of the operation, receiving more than 14 juta dollar AS from lembaga pembayar royalti. Following his September 2024 indictment on wire fraud and money laundering conspiracy charges, Smith entered a guilty plea in March 2026. Smith didakwa pada 2024 dan kemudian mengaku bersalah pada Maret 2026.
Because digital streaming royalties rely on a shared pool funded by subscriber fees and ad revenue, every fraudulent stream siphoned funds away from authentic musicians who depend on legitimate listenership for their livelihoods.
Federal judges ordered Smith to serve an 18-month prison term followed by two years of supervised release, alongside the mandatory forfeiture of $8,091,843.64.
Smith Faces Sentencing for AI Streaming Fraud
During the sentencing proceedings, Smith asked for probation without imprisonment, expressing deep remorse. They maintained that Smith used increasingly deceptive tactics to sustain the streaming manipulation and lied to police when confronted with the investigation.
In a letter to the court quoted by Ars Technica, prosecutors wrote, Selama bertahun-tahun, Smith menjalankan modus penipuan canggih yang mencuri jutaan dollar royalti musik dari para pemegang hak. Smith is recognized as the first person in the United States to face criminal charges related to AI-assisted streaming fraud.