A 54-year-old man from North Carolina pleaded in federal court this week to a charge of using artificial intelligence to flood music streaming sites with phony music, which he then used to manipulate billions of bot streams to collect more than $8 million in royalties that belonged to other artists.
Michael Smith, a man from Cornelius, North Carolina, pleaded guilty on March 19, 2026, in Manhattan federal court conspiracy to commit wire fraud. This is the first case in the United States to charge a person in a crime related to the use of artificial intelligence in music streaming scams.
Between 2017 and 2024, Smith created hundreds of thousands of AI-made music tracks, including ones with nonsensical titles, which he then uploaded to Spotify, Apple Music, Amazon Music, YouTube Music, and other platforms. He then used thousands of bot accounts to play the songs billions of times.
A tweet from X.
The scheme worked because streaming services pay artists based on how many times a song gets played. Fake streams meant real money flowed to Smith instead of legitimate musicians.
Smith partnered with an unnamed co-conspirator and the CEO of an AI music company to crank out massive catalogs of computer-made songs at almost no cost. He built networks of fake listener accounts using bulk email addresses and automation software. The bots streamed in patterns that looked like normal human listening spread across thousands of tracks to dodge detection algorithms.
U.S. Attorney Jay Clayton put it plainly:
“Michael Smith generated thousands of fake songs using artificial intelligence and then streamed those fake songs billions of times… Although the songs and listeners were fake, the millions of dollars Smith stole was real.”
The U.S. music streaming industry is worth roughly $28 billion globally, with American artists and rights holders relying on fair royalty pools. Every fake stream dilutes payouts for real creators from indie songwriters grinding in Nashville or Los Angeles to major label acts. Platforms already struggle with fraud; this case shows how AI supercharges the problem, letting one person game the system for years.
Smith faces up to five years in prison. Sentencing is set for July 29, 2026, before U.S. District Judge John G. Koeltl. He agreed to forfeit $8,091,843.64 the bulk of what prosecutors say he stole. The original indictment had charged him with additional counts that could have carried 20 years each.
Social media is split. Some users on X called the operation a “clever loophole exploit” that exposed flaws in how platforms reward volume over authenticity. Others labeled it straight-up theft from hardworking musicians.
“He didn’t create art he created a scam,”
One reply summed up the anger.
Smith’s case sets a precedent as AI tools get cheaper and smarter. Regulators and platforms are now under pressure to tighten detection and protect the royalty system that keeps American music alive. One man’s bots just proved how fragile that system can be and how real the consequences are when it breaks.
