He Built 10,000 Robot Fans: AI Music Fraudster Sentenced in $8 Million Royalty Scam

The economics of streaming pay fractions of a cent per play, which means the honest artist needs an audience and the dishonest one needs only arithmetic. Michael Smith did the arithmetic at industrial scale: hundreds of thousands of AI-generated songs, thousands of fake listener accounts, and software to press play forever. On Monday in Manhattan, the bill arrived — 18 months in federal prison for a scheme the Justice Department says collected more than $8 million in royalties that belonged to real musicians.

Smith, 54, of Cornelius, North Carolina, was sentenced by U.S. District Judge John G. Koeltl after pleading guilty in March to one count of conspiracy to commit wire fraud. Prosecutors described the case as the first criminal prosecution of its kind involving AI-assisted streaming fraud.

An audience of bots

According to the Justice Department, the scheme ran from 2017 through 2024. Smith created thousands of fake accounts on Spotify, Apple Music, Amazon Music and YouTube Music, and used automated software to stream songs he controlled again and again — many of the songs themselves generated using AI. At times he operated as many as 10,000 bot accounts simultaneously, and he spread the fake streams across a catalog of hundreds of thousands of AI tracks so that no single song's numbers would spike suspiciously.

The scale, laid out in court, is the part that reads like satire until you remember it was real money. In April 2023 alone, prosecutors said, Smith's operation generated 80.9 million fraudulent streams on YouTube Music family plans. In the same category that month, Taylor Swift's entire catalog — the biggest artist on Earth, at the height of the Eras era — received 9.3 million. The robots out-streamed her nine to one, and every one of those plays moved royalty money out of the pool that pays actual artists and songwriters.

"Fake songs in the place of creativity"

"Michael Smith exploited super intelligence technology to generate a fraud," U.S. Attorney Jamie McDonald said. "By flooding music streaming platforms with automated bots in the place of consumers, and fake songs in the place of creativity, Smith robbed millions in royalty payments from genuine artists and their fans. This Office is committed to ensuring the integrity of all markets, and protecting the public from those who use super intelligence for fraud."

Eighteen months will strike some in the music business as light for $8 million — and as a signal anyway. The platforms have spent years quietly deleting fake streams and clawing back royalties civilly; a federal conviction announces that the playbook now carries prison time. Every royalty pool is a fixed pot divided by reported plays, which means streaming fraud is never victimless and never really about the platforms: it is a tax on every working artist, collected in fractions of a cent, millions of times. Smith just got caught collecting it.