US Man Arrested for Defrauding $10M in Royalties via AI-Generated Songs and Bot Streaming

54-year-old North Carolina musician Michael Smith recently pleaded guilty to conspiracy to commit wire fraud. He defrauded over $10 million in royalties through large-scale streaming fraud on major music platforms like Spotify and Apple Music. He now faces a fine of about $8.09 million and up to 5 years in prison.

Smith bought hundreds of thousands of AI-generated songs from associates, uploaded them in bulk to platforms, and used automated AI bots to generate billions of streams. To evade detection, he used VPNs to disguise access, employing over 1,000 bot accounts at peak times, managed via 52 cloud service accounts.

This fraud model generated about 660,000 plays daily, with annual illegal income exceeding $1.2 million. US prosecutors emphasized that Smith's actions seriously harmed the rights of real artists, and he must pay for this AI-assisted fraud.