For seven years a musician from North Carolina ran what prosecutors call the first scheme of its kind in the United States. He filled streaming services with hundreds of thousands of songs that no human wrote, then used an army of bots to play them billions of times and collect the royalties. On Tuesday a federal judge in Manhattan sent him to prison for it.
Michael Smith, 54, of Cornelius, North Carolina, was sentenced by US District Judge John G. Koeltl to 18 months behind bars, followed by two years of supervised release. He was ordered to forfeit 8,091,843 dollars and 64 cents, the sum the government traced to the fraud. Smith had pleaded guilty in March to one count of conspiracy to commit wire fraud.
The mechanics were patient rather than clever. Smith generated a vast catalogue of AI-made tracks and spread his fake listens thinly across thousands of them, a few plays each, so that no single title drew the attention of the fraud-detection systems the platforms use to catch exactly this. At its peak the operation ran something like 661,000 streams a day and brought in more than a million dollars a year. It touched Spotify, Apple Music, Amazon Music and YouTube Music.
A rounding error with a victim
Streaming pays from a shared pot. Every fraudulent play Smith manufactured drew a fraction of a cent that would otherwise have gone to a real songwriter or performer. Spread across billions of streams and seven years, those fractions became eight million dollars that the industry's own accounting quietly handed to a machine's output instead of a person's.
The case is a marker because it answers a question the music business has been circling for a while. AI-generated tracks are not illegal, and gaming streams is an old trick. What the Justice Department established here is that doing both at scale, to divert a pool of money meant for working artists, is wire fraud that ends in a cell.
It is a modest sentence for a long con, and the modesty is part of the story. The tools that made it possible, cheap music generation and cheap automation, are now in everyone's hands, and the economics that made it worth doing have not changed. The same drift of value from people to automated output turns up elsewhere on this beat, from who gets paid for a chatbot's answers to the flood of machine-made submissions swamping systems built for humans. Smith is the first to go to prison for it. He will not be the last.
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