“Although the songs and listeners were fake, the millions of dollars Smith stole was real. Millions of dollars in royalties that Smith diverted from real, deserving artists and rights holders”: US Man pleads guilty to industrial scale AI fraud

A North Carolina man has pleaded guilty to AI-related fraud – creating thousands upon thousands of tracks and then flooding the streaming platforms with them, generating billions of plays through automated bots.

As part of a deal with federal prosecutors, Michael Smith pleaded guilty on Friday (March 20) to conspiracy to commit wire fraud. So far he’s one of the few individuals involved in this sort of crime that the law enforcement agencies have caught up with.

“Michael Smith generated thousands of fake songs using artificial intelligence and then streamed those fake songs billions of times,” said federal attorney Jay Clayton in a statement.

“Although the songs and listeners were fake, the millions of dollars Smith stole was real. Millions of dollars in royalties that Smith diverted from real, deserving artists and rights holders. Smith’s brazen scheme is over, as he stands convicted of a federal crime for his AI-assisted fraud.”

The sheer volume of slop that Smith generated was industrial. Between 2017 and 2024, when he was charged, he amassed more than 660,000 streams daily, accumulating royalties of over $10 million between those years.

Back in 2024, then-US attorney Damian Williams said that Smith had stolen “millions in royalties that should have been paid to musicians, songwriters, and other rights holders whose songs were legitimately streamed” and it was, ahem, “time for Smith to face the music”.

Even with his plea deal, Smith faces up to five years in prison and a forfeiture of over $8 million when he is sentenced in four months’ time.

The sad fact is though, that Smith is an exception – most AI fraudsters get away with it scot-free. In the US federal enforcement agencies simply do not have the resources to pursue every purveyor of slop, and in any case a significant number of such individuals reside in countries that, well, shall we say, have traditionally taken a more lax view of copyright law. Smith’s big mistake seems to have been sheer greed – had he churned out less noticeable quantities of it, he might have got away with it...