A North Carolina musician has been sentenced to 18 months in federal prison for orchestrating an automated streaming fraud scheme that siphoned over $10 million in royalty payouts using artificial intelligence and bot farms.

Michael Smith, a musician and former industry executive (not to be mistaken for singer Michael W. Smith), had used generative AI to mass-produce hundreds of thousands of short, rudimentary tracks. According to federal prosecutors in the Southern District of New York, Smith then coordinated thousands of automated bots to stream these AI-generated tracks billions of times across major streaming platforms including Spotify, Apple Music, and Amazon Music. To avoid triggering any platform anomaly alarms, Smith deliberately distributed the artificial plays across an expansive catalog of thousands of track titles, keeping individual stream counts low enough to evade fraud filters while accumulating massive sums in aggregate.

United States Attorney's Office - Image: Department of Justice

The scale of the operation rivaled or even surpassed the engagement metrics of mainstream global superstars. Court documents revealed that during a single month in 2023, Smith’s bot network generated roughly 80.9 million streams on his fake tracks, dwarfing the streaming volume of Taylor Swift, whose entire catalog only managed 9.3 million streams. Because digital streaming services typically pull royalty payments from a shared pool funded by user subscriptions and ad revenue, Smith actions essentially stole the available funds meant for genuine human artists, songwriters, and independent creators.

This ruling is huge as it marks the first time federal authorities have criminally charged an individual for large-scale, AI-assisted music streaming manipulation. The prosecutors emphasized that while AI offers legitimate avenues for artistic exploration, its exploitation for automated cyber-enabled financial fraud poses an immediate threat to the economic integrity of creative industries.

In addition to his 18-month prison sentence, Smith was ordered by the court to serve two years of supervised release and pay over $8 million in forfeiture, alongside thousands of dollars in restitution. The investigation was handled jointly by federal prosecutors and the FBi, signaling heightened regulatory scrutiny over automated bot operations and digital royalty distribution networks.