Man Arrested on Fraud Charges for Using AI to Inflate Streaming Numbers

Artist Michael Smith has been arrested in North Carolina for using thousands of AI bots to amass more than $10 million in streams.

A Cornelius, North Carolina man named Michael Smith has been detained for using AI bots to record and upload thousands of songs to streaming platforms to amass over $10 million in royalties, according to a US Justice Department press release.

Between 2017 and 2024, Smith allegedly automated thousands of AI bots to register accounts on services like Spotify, YouTube Music, and Apple Music. They uploaded thousands of AI-generated tracks, according to the indictment, and then separate bots streamed all of them billions of times.

Smith allegedly estimated that he could use the accounts to generate over 661,000 streams per day, equating to annual royalties of over $1.2 million. He has been charged with wire fraud, wire fraud conspiracy, and money laundering conspiracy for essentially diverting payments from artists using the streaming platforms as intended.

“SMITH made numerous misrepresentations to the Streaming Platforms in furtherance of the fraud scheme,” reads the release. “For example, SMITH repeatedly lied to the Streaming Platforms when he used false names and other information to create the Bot Accounts and when he agreed to abide by terms and conditions that prohibited streaming manipulation.”

A statement from Mechanical Licensing Collective (MLC) CEO Kris Ahrend reads: “As the DOJ recognized, The MLC identified and challenged the alleged misconduct, and withheld payment of the associated mechanical royalties, which further validates the importance of The MLC’s ongoing efforts to combat fraud and protect songwriters.”

All three of Smith’s charges carry a maximum penalty of 20 years in prison apiece.