Music Producer Arrested for Allegedly Using AI-Generated Songs to Scam Streaming Platforms

In a major case that has rocked the music industry, Michael Smith, a 52-year-old music producer from Cornelius, N.C., has been arrested for allegedly orchestrating a scheme that defrauded streaming platforms out of more than $10 million in royalties. According to a federal indictment, Smith is accused of using AI-generated songs and automated bot accounts to artificially inflate streaming numbers on platforms like Spotify, Apple Music, and Amazon Music.

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Smith allegedly began this scheme in 2018, working with an AI music company to churn out hundreds of thousands of songs. Prosecutors claim he manipulated streaming algorithms by creating thousands of fake accounts and using a VPN service to mask his location. These bot accounts were then used to automatically stream the AI-generated music at an extraordinary rate, sometimes reaching as many as 661,440 streams per day.

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At first, Smith is said to have fraudulently streamed music he owned, but the platforms' detection systems made it difficult to inflate streaming numbers for the same track repeatedly. To get around these safeguards, he shifted his focus to producing and uploading massive volumes of AI-generated songs. Internal communications included in the indictment suggest that Smith told his co-conspirators they needed to “get a TON of songs fast to make this work” in order to avoid anti-fraud policies.

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Despite raising suspicions over the years, Smith denied engaging in any illegal activity. In 2019, one of the streaming platforms accused him of inflating streams, but he maintained his innocence, saying, “I have never done anything to artificially inflate my streams.” Similarly, when questioned by the Mechanical Licensing Collective (MLC) in 2023, he claimed that his songs were human-authored, not AI-generated. However, prosecutors now contend that these denials were false.

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Smith is currently facing several serious charges, including wire fraud, conspiracy to commit wire fraud, and money laundering. His actions highlight the growing concern about streaming fraud in the music industry, particularly as AI-generated content becomes more prevalent.

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In response to the indictment, The MLC released a statement acknowledging its role in identifying the alleged misconduct. "The MLC identified and challenged the alleged misconduct, and withheld payment of the associated mechanical royalties," said MLC CEO Kris Ahrend. He emphasized the importance of their ongoing efforts to combat fraud and protect songwriters in this evolving digital landscape.

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This case serves as a reminder of the challenges the music industry faces as technology advances, and how bad actors can exploit these platforms for financial gain. As AI continues to reshape how music is created and consumed, ensuring the integrity of streaming data will be critical.

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For more details, check out the original report on Variety.

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