The United States Attorney for the Southern District of New York announced the unsealing of a three-count criminal indictment against Michael Smith, a North Carolina musician. The indictment charged Smith with wire fraud, wire fraud conspiracy, and money laundering conspiracy for allegedly using artificial intelligence (AI) tools and thousands of bots to fraudulently stream songs billions of times to obtain more than $10 million in undeserved royalty payments.

Michael Smith Exploited AI-Generated Songs

According to the unsealed indictment, 52-year-old Michael Smith used hundreds of thousands of AI-generated songs to manipulate streaming numbers across various music streaming platforms, such as Amazon Music, Apple Music, Spotify, and YouTube Music, to continuously stream the AI-generated songs.

He partnered with the CEO of an unnamed AI music company, who supplied him with thousands of tracks per month in exchange for a cut of the streaming revenue. Smith then deployed thousands of automated bot accounts to continuously stream these AI-generated songs, avoiding detection and claiming over $10 million in royalty payments.

The songs were given randomly generated names and artist identities to make them appear as if they were created by real artists, rather than AI.

Smith has been charged with wire fraud conspiracy, wire fraud, and money laundering conspiracy, each of which carries a maximum sentence of 20 years in prison. The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit, and the FBI has praised the work of the investigators in uncovering this sophisticated scheme.

Crackdown on Fraudulent Streaming Practices

The case against Michael Smith is part of a broader effort by authorities to combat the growing problem of fraudulent streaming practices. Earlier this year, a man in Denmark was sentenced to 18 months in prison for a similar scheme. Music streaming platforms, such as Spotify, Apple Music, and YouTube, have also taken steps to address the issue, including changes to their royalty policies and increased efforts to detect and prevent artificial stream inflation.

The music industry has seen a growing backlash, with artists signing open letters calling for the end of the predatory use of AI in the industry.

The charges against Michael Smith represent a significant step in the fight against the misuse of AI technology in the music industry. As the case unfolds, it will likely have far-reaching implications, serving as a warning to those who seek to exploit the system and a call to action for the industry to address the challenges posed by the rise of AI-generated music. The outcome of this case will be closely watched as the music industry and streaming platforms navigate the complex landscape of recent technological advancements.

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