The man who defrauded streaming services of $8 million with AI-generated slop songs has pleaded guilty to conspiracy to commit wire fraud.
On Thursday, Michael Smith, the man accused of defrauding music streaming services with AI-generated slop tracks, pleaded guilty to one count of conspiracy to commit wire fraud. Smith agreed to pay back the $8,091,843.64 he received in royalties from the streamers, and his charge carries a maximum sentence of five years in prison.
The Department of Justice indicated that besides forfeiting his earnings and the maximum prison sentence, Smith could also be sentenced to three years’ supervised release and a maximum fine of $250,000. He is scheduled to be sentenced by U.S. District Judge John G. Koeltl on July 29.
Notably, the DOJ said it would not prosecute Smith further, but would consider tax violations between 2017 and 2024 (when the fraud was being committed) should it discover them.
The 54-year-old Smith admitted to creating “hundreds of thousands” of songs using AI, and then using thousands of bots to stream those songs billions of times. By dispersing these streams across thousands of accounts, he successfully evaded detection by streaming services, including Apple Music, Spotify, Amazon Music, and YouTube Music.
An investigation revealed Smith was using 1,040 accounts, each streaming around 636 of his AI-generated tracks a day, which added up to approximately 661,440 streams a day. That potentially earned him $3,307.20 per day, $99,216 per month, and over $1.2 million a year.
“Michael Smith generated thousands of fake songs using artificial intelligence and then streamed those fake songs billions of times,” said Jay Clayton, a U.S. attorney for the Southern District of New York.
“Although the songs and listeners were fake, the millions of dollars Smith stole [were] 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.”
“Smith stole millions in royalties that should have been paid to musicians, songwriters, and other rights holders whose songs were legitimately streamed,” added U.S. Attorney Damian Williams.
