Michael Smith, a musician from North Carolina, has admitted guilt in a scheme that fraudulently collected over $10 million in royalties from streaming services like Spotify, Apple Music, Amazon Music, and YouTube Music.

Smith, aged 54, obtained hundreds of thousands of AI-created songs from an accomplice, uploaded them to streaming platforms, and used automated AI bots to generate billions of fake streams.

According to legal documents made public when the charges were filed in September 2024, Smith illegally boosted the number of plays on his songs between 2017 and 2024 with the help of a music promoter and the CEO of an AI music company. To evade detection, the bots used virtual private networks (VPNs) to access the platforms.

In an October 4, 2018, email to his collaborators, he stated they needed “a TON of content with small amounts of Streams” to avoid problems and “to get a TON of songs fast to make this work around the anti fraud policies.”

At its height, Smith used more than 1,000 bot accounts to inflate stream counts. On October 20, 2017, he sent himself an email detailing his operation of 52 cloud service accounts, each with 20 bot accounts.

Smith calculated each bot could stream about 636 songs daily, totaling roughly 661,440 streams per day. With an average royalty rate of $0.005 per stream, the daily earnings would be $3,307.20, the monthly earnings would be $99,216, and the annual earnings would exceed $1.2 million.

“Michael Smith used artificial intelligence to create and stream thousands of fake songs billions of times. While the songs and listeners were fake, the millions of dollars Smith stole was real,” said U.S. Attorney Jay Clayton on Wednesday. “Millions of dollars in royalties were diverted from legitimate artists and rights holders, thanks to Smith. Smith’s bold scheme is over, now that he’s been convicted of a federal crime for fraud enabled by AI.”

Prosecutors stated that Smith illegally earned over $10 million in royalty payments by having his bots stream AI-generated songs billions of times. A February 2024 email confirmed generated “over 4 billion streams and $12 million in royalties since 2019.”

Smith has agreed to forfeit $8,091,843.64 and could face up to 5 years in prison after pleading guilty to conspiracy to commit wire fraud.