A North Carolina man has pled guilty to defrauding streaming platforms of more than $8 million in royalties by using AI-generated songs and bots — agreeing to return the money as he awaits sentencing.
Mike Smith, pled guilty to one count of conspiracy to commit wire fraud before U.S. District Judge John G. Koeltl. The 54-year-old is expected to be sentenced in July, according to a report by Rolling Stone.
The charge carries a maximum sentence of five years in prison. In the meantime, Smith has agreed to pay a staggering $8,091,843.64 in forfeiture.
On Thursday, Smith admitted to creating hundreds of thousands of songs with generative AI, before using thousands of bots — which posed as real-life listeners — to stream the songs billions of times in order to obtain revenue.
He was reportedly able to avoid detection by spreading the song plays across thousands of fake accounts on multiple streaming platforms, including Amazon Music, Apple Music, Spotify, and YouTube Music, leading to him eventually raking in more than $8 million.
“Although the songs and listeners were fake, the millions of dollars Smith stole was real,” Jay Clayton, U.S. Attorney for the Southern District of New York, said. “Smith’s brazen scheme is over, as he stands convicted of a federal crime for his AI-assisted fraud.”
Clayton further explained that the millions of dollars Smith acquired had been “diverted from real, deserving artists and rights holders.”
After years of trying to build a music career — at one point, producing and appearing as a judge on a short-lived BET series — Smith eventually opted for launching an AI scam, which was detailed in an investigation published by Rolling Stone earlier this year.
“He had 1,040 accounts, each one streaming approximately 636 songs a day,” the report stated. “With his music accruing about 661,440 streams a day, and the average royalty per stream at half a cent, Smith estimated he was earning $3,307.20 a day, $99,216 a month, and over $1.2 million a year.”
The Department of Justice has also chimed in on the matter, recommending that Smith be sentenced to three years of supervised release and a maximum fine of $250,000 — in addition to the other penalties he is set to receive.
Alana Mastrangelo is a reporter for Breitbart News. You can follow her on Facebook and X at @ARmastrangelo, and on Instagram.
