Topline
A man from North Carolina was handed an 18-month prison sentence on Tuesday after pleading guilty to using thousands of bot accounts to stream his AI-generated songs billions of times and fraudulently earning $8 million in royalties from streaming platforms, in a case federal prosecutors said was the first criminal case involving AI-music streaming fraud.
Federal prosecutors said a North Carolina man used thousands of bot accounts and hundreds of thousands of AI generated songs to fraudlently earn $8 million from music streaming platforms.
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Key Facts
In a press release, the U.S. Attorney’s Office for the Southern District of New York said Michael Smith, 54, received the prison sentence for participating in a scheme to “defraud music streaming platforms and musicians of royalty payments.”
Smith previously pled guilty earlier this year to one count of conspiracy to commit wire fraud in the streaming fraud case.
Prosecutors said Smith’s streaming fraud ran from 2017 to 2024, during which he used “as many as 10,000 Bot Accounts” on platforms like Amazon Music, Apple Music, Spotify, and YouTube Music to stream AI-generated music that he owned.
The bot accounts were created using fake email ids and “fraudulently obtained debit cards,” and he used AI to create “hundreds of thousands” of songs to run his operation.
These songs, owned by Smith, were streamed “billions of times” by his bot accounts, and he used a large catalog to avoid scrutiny on any particular song.
Surprising Fact
In its press release, the federal prosecutor’s office compared Smith’s fraudulent streaming numbers with pop megastar Taylor Swift. Smith’s catalog of AI songs generated 80.9 million streams in April 2023 on YouTube Music’s family plan. In comparison, Swift’s library generated 3 million streams on YouTube Music from family plans that month.
big number
$8,091,843.64. That is the total amount of money Smith was ordered to forfeit. In addition to the prison term and forfeiture, he was also sentenced to two years of supervised release.
Tangent
Last week, President Donald Trump signed an executive order renaming artificial intelligence to “super intelligence.” The order directed federal departments and agencies to use “Super Intelligence” and “SI” in official communications and documents and added that the executive branch will no longer “acknowledge the usage of ‘Artificial Intelligence’ and ‘AI’ in any applicable setting.” Tuesday’s release by federal prosecutors extensively uses “Super Intelligence.” The case is referred to as “Super Intelligence-Assisted Music Streaming Fraud,” and U.S. Attorney Jamie McDonald says Smith “exploited super intelligence technology to generate a fraud.” Earlier on Tuesday, Reuters reported that the Justice Department has directed its employees to use “super intelligence” instead of “artificial intelligence.” The memo added that the directive also extends to “court filings when appropriate.”
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