Michael Smith, a musician from North Carolina, was indicted for a fraud scheme that generated more than $10 million in royalties by using AI-generated songs and bots. Between 2017 and 2024, Smith uploaded hundreds of thousands of AI-produced songs to streaming platforms like Spotify (SPOT), Apple Music (AAPL), and YouTube Music (GOOGL). He used more than 1,000 bot accounts to inflate stream counts, disguising his activities with VPNs. At the peak of the scheme, Smith’s bots generated more than 4 billion fake streams, collecting millions in fraudulent royalties before his arrest. He’s facing three charges: wire fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering. Each of these charges carries a maximum penalty of 20 years in prison, meaning that if convicted on all counts, he could face up to 60 years behind bars.

Just to clarify: Smith created the songs with AI, which are not protectable by copyright and therefore not eligible for royalty payments. He created a massive listening farm – bots that listened to billions of streams – and collected more than $10 million in illegal royalties.

To tell you the truth, I’m very impressed with the tech stack he built to do this. Here’s the thing: he got caught. Viewability and fraud have been omnipresent for years. There are thousands of bot farms busy visiting websites, watching videos, and cranking up view counts and clicks all over the place. AI tools make building these fraudulent ecosystems much, much easier. Soon, it will be as easy as using ChatGPT. Then what?

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