AI music fraudster sentenced to 18 months for $8M streaming scam
Guilty plea and sentencing
Michael Smith, 54, of Cornelius, North Carolina, was sentenced to 18 months in prison on charges stemming from a coordinated scheme to defraud music streaming platforms using automation and AI-generated content. Smith pleaded guilty on March 19, 2026, to one count of conspiracy to commit wire fraud under 18 U.S.C. § 371 before U.S. District Judge John G. Koeltl in the U.S. District Court for the Southern District of New York, Manhattan.
The U.S. Attorney's Office reported that Smith used thousands of automated accounts and bot networks to stream hundreds of thousands of AI-generated songs billions of times across major streaming services U.S. Department of Justice. The scheme generated more than $8 million in fraudulent royalties, which Smith was ordered to forfeit in full—$8,091,843.64—following sentencing.
How the fraud operated
Smith's conduct admitted in his guilty plea reveals a systematic exploitation of music streaming platforms' royalty systems. Prosecutors documented that the defendant deployed thousands of fake accounts coordinated through bot infrastructure to artificially inflate stream counts on AI-generated compositions. These bot-driven streams were conducted across Spotify, Apple Music, Amazon Music, and YouTube Music The Independent.
By flooding streaming platforms with billions of artificially generated plays, Smith fraudulently obtained royalty payments intended for legitimate artists and songwriters. The U.S. Attorney's Office characterized the scheme as a direct theft from creators whose work competes for listener attention and platform resources on the same services Rolling Stone.
Sentencing disparity and outcome
Federal prosecutors had initially sought at least 46 months in prison, citing federal sentencing guidelines that recommended 46 to 57 months Billboard. Federal probation officials, however, recommended 24 months, while Smith's defense counsel sought to avoid imprisonment entirely, arguing for probation.
Judge Koeltl ultimately imposed the 18-month sentence, well below prosecutors' request but significantly stricter than defense recommendations. Smith was also ordered to serve two years of supervised release following his prison term Department of Justice.
The case marks a rare prosecution of automated streaming fraud at scale—a category of agent-driven crime where bots and AI-generated content are weaponized to extract economic value from digital platforms without legitimate creative contribution.