North Carolina Musician Arrested in Groundbreaking AI-Driven Music Streaming Fraud Case

A North Carolina musician, Michael Smith, has been charged with orchestrating a music streaming fraud scheme, using artificial intelligence (AI) and bots to manipulate music streams on major platforms like Spotify, Apple Music, and Amazon Music.

According to U.S. Attorney Damian Williams, Smith generated billions of fake streams for AI-created music, pocketing over $10 million in royalty payments that rightfully belonged to other musicians, songwriters, and rights holders.

Smith allegedly used AI technology to create hundreds of thousands of songs and automated programs (bots) to stream these tracks billions of times across various streaming platforms. The case marks the first known instance of AI being used to artificially inflate music streams on such a massive scale. Smith was arrested in North Carolina and will face charges in federal court.

Authorities say Smith’s operation involved creating thousands of fake accounts across streaming platforms to continuously stream his AI-generated songs. At one point, Smith estimated he could generate over 660,000 streams per day, leading to annual royalties exceeding $1.2 million. To avoid detection, Smith spread the fraudulent streams across a vast catalog of songs, rather than concentrating the streams on a few tracks.

In his attempts to bypass anti-fraud policies on streaming platforms, Smith turned to AI technology in 2018. He collaborated with an AI music company CEO and a music promoter to generate thousands of songs each week. The songs, often given random names and file identifiers, were uploaded to streaming platforms under fake artist names, making them appear as though they were legitimate.

This scheme highlights the growing issue of streaming manipulation, especially with the increasing use of AI in the music industry. Streaming platforms distribute royalties based on the number of times a song is played. Fraudulently inflating streams diverts these payments from genuine artists, allowing individuals like Smith to exploit the system for profit.

FBI Acting Assistant Director Christie M. Curtis stated that this case exemplifies the Bureau’s commitment to combating the misuse of advanced technology for illicit financial gain, especially when it compromises the integrity of industries such as music.

Smith is charged with multiple counts, including conspiracy to commit wire fraud and money laundering. If convicted, he faces up to 20 years in prison for each charge. The prosecution of this case is being led by the Complex Frauds and Cybercrime Unit, with Assistant U.S. Attorneys Nicholas W. Chiuchiolo and Kevin Mead overseeing the legal proceedings.