American Gets 18 Months in Prison for AI Music Streaming Fraud Scheme

First AI Music Streaming Fraud Case Ends in Prison

A 54-year-old North Carolina resident has become the first person to be imprisoned for AI-assisted music streaming fraud. Michael Smith was sentenced to 18 months in prison and ordered to pay $8,091,843.64 in forfeiture after pleading guilty to conspiracy to commit wire fraud. The case, investigated by the FBI, is described as the first criminal case of its kind involving artificial intelligence and streaming royalty manipulation.

Smith was charged in September 2024 and pleaded guilty in March 2026. He was sentenced earlier this week and will also serve two years of supervised release following his prison term.

The Scheme: Bots and AI-Generated Songs

Between 2017 and 2024, Smith built a large-scale operation designed to exploit royalty payment systems. He created thousands of fake streaming accounts on services including Spotify, YouTube Music, Apple Music, and Amazon Music, and used AI tools to generate hundreds of thousands of songs hosted on those platforms. As many as 10,000 bots then continuously streamed his own AI-generated music, making the activity appear to be legitimate listener demand.

According to the court report, Smith's AI-generated tracks were streamed billions of times over the lifetime of the fraud. Prosecutors say he collected more than $8 million in fraudulent royalty payments as a result.

Scale of the Fraud

The scale of the operation was highlighted by a comparison with legitimate artists. In April 2023, the entire catalogue of Taylor Swift received 9.3 million streams on YouTube Music from family plan streams. In the same month, Smith's bot accounts used family plans to fraudulently stream his AI-generated music 80.9 million times, nearly nine times as many.

U.S. Attorney Jamie McDonald said the scheme robbed genuine artists and their fans. "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," McDonald said, adding that the office is committed to ensuring the integrity of all markets and protecting the public from those who use super intelligence for fraud.

Sources: Tomshardware · Ars Technica