A man who used AI songs to steal millions in music royalties has been sentenced to 18 months in prison, capping off the first-ever criminal case over streaming fraud.
Michael Smith, 54, pleaded guilty in March to using AI to generate thousands of songs and then streaming them billions of times with bots. His was the first criminal conviction over a tricky problem that’s plagued the music industry for years.
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Ahead of sentencing, his lawyers had asked the judge for no prison time, arguing the harm to any single artist was “insignificant” and “no victim suffered any real harm.” But at a hearing on Tuesday (Oct. 6) in Manhattan federal court, Judge John G. Koeltl ordered him to serve a year and a half in jail, followed by two years of supervised release.
Jamie McDonald, the Manhattan federal prosecutor, said in a statement following the sentencing that Smith had “exploited” the new technology to commit streaming fraud on a massive scale: “By flooding music streaming platforms with automated bots in the place of consumers, and fake songs in the place of creativity, Smith robbed millions in royalty payments from genuine artists and their fans.”
Smith’s attorney did not immediately return a request for comment.
Streaming fraud — using artificial means to boost the plays of a particular song — has been an issue for the music industry for years. But the rise of artificial intelligence has supercharged the problem, both by enabling the creation of phony songs and by powering bot networks to play those tracks on repeat.
Bots can certainly be used to inflate the popularity of real acts — an allegation leveled by Drake at Universal Music Group in their bruising legal battle over Kendrick Lamar’s “Not Like Us.” But the far more common and more damaging form of streaming fraud is scammers trying to pull royalties for fake or copied songs, a practice that dilutes the money paid out to real artists and songwriters.
Smith was arrested in 2024 on a three-count indictment that charged him with using thousands of bots to continuously stream songs on Spotify, Apple Music and other platforms starting in 2017. Prosecutors claimed he initially started by merely boosting the plays of his own music, then switched to mass-producing AI songs to fuel the scheme.
In March, he entered a guilty plea on a single count of wire fraud conspiracy and agreed to forfeit more than $8 million in streaming fraud proceeds. That charge carries a five-year maximum prison sentence, and federal guidelines call for between 46 and 57 months, but probation officials recommended a lighter sentence of 24 months.
In court filings ahead of sentencing, Smith’s lawyers argued he had caused only “tiny, immeasurable losses” spread across millions of songwriters and artists, and urged no prison time at all: “The effect each individual stream of one artist’s song has on every other artist’s share of total streams is not akin to a drop in a proverbial bucket — it is a drop in an ocean,” Smith’s lawyers wrote.
But prosecutors fired back that Smith had, in fact, harmed many “hard-working (and often underpaid) songwriters” and urged the judge to send him to prison for at least 46 months. “A lenient sentence will send precisely the wrong message: streaming fraud will not result in meaningful punishment.”
