Jay Clayton, U.S. Attorney for the Southern District of New York | Department of Justice
Michael Smith of Cornelius, North Carolina, pleaded guilty on Mar. 19 to conspiracy to commit wire fraud for his involvement in a scheme that used artificial intelligence and automated programs to defraud music streaming platforms and musicians of royalty payments. The announcement was made by United States Attorney for the Southern District of New York, Jay Clayton.
The case highlights concerns about the misuse of technology in the music industry, where fraudulent activity can divert significant funds from legitimate artists and rights holders. According to charging documents and public court filings, Smith created hundreds of thousands of songs using artificial intelligence and set up thousands of accounts on major streaming platforms such as Amazon Music, Apple Music, Spotify, and YouTube Music. He then used software bots to stream his AI-generated songs billions of times in an effort to mimic genuine consumer activity.
"Michael Smith generated thousands of fake songs using artificial intelligence and then streamed those fake songs billions of times," said U.S. Attorney Jay Clayton. "Although the songs and listeners were fake, the millions of dollars Smith stole was real. Millions of dollars in royalties that Smith diverted from real, deserving artists and rights holders. Smith’s brazen scheme is over, as he stands convicted of a federal crime for his AI-assisted fraud."
Smith's actions allowed him to obtain more than $8 million in royalties by spreading automated streams across many songs to avoid detection by streaming platforms. He agreed to pay $8,091,843.64 in forfeiture as part of his plea agreement.
Smith faces a maximum sentence of five years in prison for conspiracy to commit wire fraud. Sentencing is scheduled before U.S. District Judge John G. Koeltl on July 29, 2026.
Jay Clayton praised the work of the Federal Bureau of Investigation in this case. The prosecution is being handled by Assistant U.S. Attorneys Nicholas W. Chiuchiolo and Kevin Mead from the Office’s Complex Frauds and Cybercrime Unit.
