$8 Million Music Streaming Fraud Leads to Federal Prison Sentence

Michael Smith of Cornelius was sentenced on Tuesday to 18 months in federal prison for a music streaming fraud scheme that netted him $8 million.

Michael Smith Operates Bot Network From 2017 to 2024

Operating from 2017 to 2024, the 54-year-old musician used automated software and thousands of phony accounts to stream AI-generated songs billions of times. Smith enlisted individuals in the United States and abroad to register the fraudulent profiles using debit cards acquired under false pretenses from a financial services company. To evade platform fraud detectors that trigger red flags during sudden traffic spikes, he distributed the automated streams across thousands of separate tracks.

U.S. Attorney’s Office Details Super Intelligence Fraud Charges

Around 2018, Smith partnered with the chief executive officer of an artificial intelligence music company to produce hundreds of thousands of tracks, receiving thousands of new songs weekly to upload. Prosecutors from the Complex Frauds and Cybercrime Unit at the U.S. Attorney’s Office for the Southern District of New York charged Smith with wire fraud, wire fraud conspiracy, and money laundering in 2024. He reached a plea agreement in March, pleading guilty solely to the wire fraud conspiracy charge before New York federal Judge John G. Koeltl.

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.

U.S. Attorney Jamie McDonald

Court Mandates $8.1 Million in Restitution

The court also mandated that the North Carolina man pay back nearly $8.1 million in restitution to cover the royalties collected from the scheme. Assistant U.S. Attorneys Nicholas W. Chiuchiolo and Kevin Mead prosecuted the matter for the Southern District of New York.

More on this story: Mike Smith sentenced to 18 months in streaming fraud case, Rolling Stone reports