A North Carolina musician faces criminal charges for allegedly orchestrating a $10 million streaming fraud scheme using AI-generated music across major platforms including Spotify, Amazon Music, Apple Music, and YouTube Music.

The scheme, which ran from 2017 to 2024, involved collaboration with an AI music company that produced thousands of tracks. The defendant, Michael Smith, allegedly created numerous bot accounts through Family plans to artificially inflate streaming numbers while avoiding detection.

Key details of the alleged fraud:

• Smith developed a system of 52 cloud service accounts, each managing 20 bot accounts, totaling 1,040 fake listeners
• Each bot account could stream approximately 636 songs daily
• The operation generated an estimated $3,307.20 in daily royalties
• Between 2020-2023, Smith allegedly transferred $1.3 million to his bank account
• Proceeds were moved to corporate debit cards using fictitious employee names
• The scheme collected both recording and compositional royalties until the Mechanical Licensing Collective halted payments in early 2023

While creating and distributing AI music is legal when not infringing on protected content, Smith faces charges of wire fraud and money laundering conspiracy for the alleged bot-powered streaming manipulation.

MLC CEO Kris Ahrend stated this case highlights streaming fraud as a serious industry problem, emphasizing their commitment to protecting songwriters through fraud prevention efforts.

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