American Musician Accused of Massive AI Fraud: 'Streaming Services Deliberately Deceived'

USA - Musician facing three lawsuits for extensive AI fraud, intentionally deceiving streaming services.

Damian Williams, the U.S. Attorney for the Southern District of New York, and Christie M. Curtis, the Acting Assistant Director of the FBI's New York Field Office, have filed three charges against musician Michael Smith. Having already received $10 million in royalties, he is suspected of creating hundreds of thousands of songs with AI and streaming them billions of times using bots to claim royalties.

The musician has been arrested and will be arraigned before a U.S. magistrate judge in North Carolina next week.

'Through his shameless fraud, Smith stole millions in royalties that should have been paid to musicians, songwriters, and other rights holders whose songs were legitimately streamed,' said New York Attorney Damian Williams.

Acting FBI Assistant Director Christie M. Curtis stated, 'The suspect exploited the integrity of the music industry. The FBI is cracking down on those manipulating advanced technology to gain illegal profits and infringe on the genuine artistic talent of others.'

Music can be streamed through platforms like Amazon Music, Apple Music, Spotify, and YouTube Music. Each stream generates small royalty payments to the songwriter, performer, and in some cases other rights holders. Streaming fraud diverts money from legitimate musicians and songwriters whose songs are genuinely streamed by real consumers.

Smith is suspected of creating thousands of bot accounts on streaming platforms to stream songs. At one point during the past period, the musician estimated he could use the bot accounts to generate approximately 661,440 streams per day, resulting in annual royalties of $1,207,128.

The musician was aware that streaming a single song a billion times would raise suspicion. Thus, Smith planned to distribute billions of fake streams across tens of thousands of songs to avoid detection. In a 2018 email, Smith wrote, 'We need to quickly have a LOT of songs to make this work.'

In a 2019 email to Smith, one accomplice wrote, 'Remember what we're doing here... this is not 'music,' it's 'instant music.' The accomplice is suspected of eventually supplying hundreds of AI-generated songs to Smith. The indictment alleges that Smith then randomly generated song and artist names for audio files to make them appear to be produced by real artists instead of artificial intelligence. AI was also used for this purpose.

The Cornelius, North Carolina musician is charged with conspiracy and fraud, carrying a maximum prison sentence of 20 years.