18 Months Prison Sentence for AI-Powered Music Fraud

Michael Smith gained more than $8 million in illicit profits from music platforms with the artificial intelligence-supported music fraud he carried out between 2017 and 2024. Smith, 54, who lives in North Carolina, carried out systematic manipulation through the software he developed and thousands of bot accounts.

As a result of the case heard in the Federal Court of the Southern District of New York, Smith was sentenced to 18 months in prison. The court also ordered the confiscation of $8.09 million obtained from the crime.

The system established by Smith started to work by targeting digital music platforms since 2017. Smith, who included his own musical works in the system at the first stage, later turned to producing large amounts of music pieces using artificial intelligence software to meet the demand.

In order to avoid being caught by the platforms' anti-fraud systems, Smith created hundreds of thousands of different songs and distributed these songs among thousands of fake accounts. There were periods when up to 10 thousand bot accounts were active in the system at the same time.

In addition to e-mail addresses, illegally obtained bank card information was used to create fake accounts. Bots listened to these tracks produced by artificial intelligence billions of times, allowing small amounts of royalty income to be generated from each listen.

The scale reached by the system was clearly evident in the April 2023 data. While Taylor Swift's entire catalog received 9.3 million streams on YouTube Music family plans, Smith's bot accounts played his own AI music 80.9 million times on the same platform.

This method, which targets major services such as Amazon Music, Apple Music, Spotify and YouTube Music, directly affected not only the platforms but also the royalties that real artists will receive. Since the royalty systems of music platforms distribute revenue pools according to streaming rates, fake streams caused a deduction from the share of real rights holders.

Smith pleaded guilty in March 2026 to a charge of conspiracy to commit wire fraud. The case was recorded as one of the first criminal cases filed in the United States due to artificial intelligence-supported music streaming fraud.

The court sentenced Smith to 18 months in prison as well as two years of supervised release. It was also ordered that $8,091,843.64 obtained from crime be confiscated.

The center of the case is not the production of music with artificial intelligence, but the manipulation of copyright revenues by having these tracks listened to fakely by automatic accounts.