A federal judge in Manhattan on Oct. 6 sentenced Michael Smith, a 54-year-old musician from Cornelius, N.C., to 18 months in prison for a seven-year scheme in which thousands of bot accounts streamed hundreds of thousands of songs, most of them made with A.I., billions of times, the Justice Department said.
It is the first federal criminal prosecution for music streaming fraud. Judge John G. Koeltl also ordered Mr. Smith to forfeit $8,091,843.64 and to serve two years of supervised release, The Quietus reported. Mr. Smith pleaded guilty in March to one count of conspiracy to commit wire fraud.
Court filings and the reporting of Rolling Stone, Wired and Music Business Worldwide show that the fraud did not begin with artificial intelligence. It began in 2017 with a small catalog of Mr. Smith’s own songs, a radio push for a disco-pop single and a profit projection he emailed to himself. A.I. arrived a year later, for a practical reason: the bots needed more songs to hide among. Distributors accused him of streaming abuse in 2018. He kept going for five more years.
A suburban dad with a catalog
Mr. Smith made his money outside music. He played in teenage hard-rock bands called Self Destruct and Outrage, studied finance at the University of North Carolina at Greensboro and earned his first real money during the Y2K scare by teaching himself to code a scan tool for the date bug, Rolling Stone reported in January. He went on to run medical businesses. By early 2017 he owned a chain of urgent-care clinics.
He spent that money on a music career. He and his wife were executive producers of One Shot, a hip-hop competition series on BET in which he appeared as a judge. The Avila Brothers, best known for their work with Usher, recorded one of his songs with Billy Ray Cyrus and Snoop Dogg.
In early 2017 he hired Tony Mantor, a Nashville producer and promoter, to take his solo album Always You and Me to radio. Mr. Mantor chose “You’re My Kind of Beautiful,” which spent 13 weeks on two adult-contemporary airplay charts and peaked at No. 35 on Billboard’s and No. 33 on Mediabase’s. Those charts track a specially encoded copy of each song every time a station plays it. “They can’t manipulate it,” Mr. Mantor told Rolling Stone.
Streaming counts carried no such code. At about the same time, according to the indictment, Mr. Smith began opening streaming accounts with fake email addresses. Prosecutors later wrote that he started “shortly after resolving” a Medicare and Medicaid billing matter, Music Business Worldwide reported. That matter ended in a $900,000 settlement with no finding of liability, announced in September 2020.
The October 2017 email
By October 2017 he had the numbers. In an email to himself cited by prosecutors, he listed 52 cloud-computing accounts, each running 20 bot accounts on the streaming services, for 1,040 in all. Each bot, he figured, could play about 636 songs a day.
That came to 661,440 streams a day. At an average of half a cent a stream, he projected $3,307.20 a day, $99,216 a month and $1,207,128 a year. Prosecutors told the court he “even created profit and loss statements showing how much profit he could obtain from each bot he operated.”
The machinery was plain. Code he had bought kept the accounts playing around the clock, Wired reported. He registered them mostly with email addresses bought in bulk, often under invented names, and paid with corporate debit cards from a Manhattan financial firm after telling it that dozens of made-up people worked for his company, according to the prosecutors’ sentencing letter. People in the United States and overseas helped register the accounts, WUNC reported. He put the bots on family plans, the cheapest way to run many accounts at once.
On Hacker News, a reader who ran the subscription numbers was struck by the overhead.
These accounts had to be listening a lot in order to generate more royalties than the subscription fees. e.g. Spotify family is $21.99/mo for six accounts. That’s $440K annually for 10,000 accounts.
The reader used today’s price, but the government’s accounting reflects the same cost. Prosecutors said Mr. Smith collected more than $14 million in all. The agreed loss of $8,091,843.64 is what was left after subtracting estimated royalties from genuine listeners and the subscription money his accounts paid back into the royalty pools.
The jazz album that vanished
The warning signs came early. In January 2018, Mr. Smith and a collaborator, Jonathan Hay, released Jazz (Deluxe) as a duo. It reached No. 1 on a Billboard chart and was gone from the ranking the next week, Kate Knibbs reported in a May 2025 Wired feature. Mr. Hay found no one discussing the record online, and Spotify’s analytics showed listeners clustered in places like Vietnam. “Nobody drops off the next week to zero,” he told Wired.
Wired, which told the story largely from Mr. Hay’s side, posted the line that summed up his suspicion.
“He had a billion streams and no fans.”
The week after a jazz album hit No. 1 on the Billboard chart, it disappeared from the ranking altogether. Its success might never have been real in the first place.
Distributors flagged the duo’s music for streaming fraud and took it down. Mr. Smith blamed uncleared samples. When Mr. Hay pressed, Mr. Smith said he had told staff at his medical clinics to stream their songs on repeat.
In October 2018 a distributor told Mr. Smith it planned to pull his releases over reports of streaming abuse. “This is absolutely wrong and crazy! ... There is absolutely no fraud going on whatsoever!” he replied, according to the indictment, as Fortune reported. In March 2019 he was writing to a streaming service to ask that his music be put back online.
Instant music
His answer to the flags was volume. In 2018, according to the indictment, he began working with the chief executive of an A.I. music company and with a music promoter, neither of them named. The executive was soon sending him thousands of songs a week. Under a master services agreement, the company was to receive $2,000 a month or 15 percent of his streaming revenue, whichever was greater.
Mr. Smith set out the reasoning in an email that October.
in order to not raise any issues with the powers that be we need a TON of content with small amounts of Streams
On Dec. 26, 2018, he told two co-conspirators that they needed “a TON of songs fast” to get around the platforms’ anti-fraud policies, prosecutors said. In May 2019 he wrote, “I can’t run the bots without content. And I need enough content so I don’t overrun each song.” Another line from that month: “If we get too many streams on one song it comes down.”
The executive was frank about the product. “Keep in mind what we’re doing musically here... this is not ‘music,’ it’s ‘instant music’ ;)” he wrote in 2019, according to the indictment. The files arrived with names like “n_7a2b2d74-1621-4385-895d-b1e4af78d860.mp3.” Mr. Smith gave them titles such as “Zygotic Washstands” and “Zymopure” and artist names such as “Calm Knuckles” and “Camel Edible,” prosecutors said in 2024.
The indictment did not name the executive. Billboard found that publishing records list Alex Mitchell, founder and chief executive of the A.I. music company Boomy, as a co-writer on at least hundreds of the more than 200,000 songs registered to Mr. Smith. Mr. Mitchell told Billboard, “We were shocked by the details in the recently filed indictment of Michael Smith, which we are reviewing. Michael Smith consistently represented himself as legitimate.” Neither he nor Boomy has been charged.
The plan paid. By June 2019, Mr. Smith reported 88 million total streams and about $110,000 a month, Mandy Dalugdug wrote in an analysis for Music Business Worldwide. On her math, 661,440 streams a day spread over 300,000 tracks works out to about two plays per song per day.
Where the money came from
That design fit how streaming pays. The services set aside a share of revenue each month and divide it by each rights holder’s share of total plays, so a stream has no fixed price. A fake play costs the platform nothing extra. It shrinks the slice paid on every real one. The Mechanical Licensing Collective, which pays songwriting royalties from streaming in the United States, told the court that fraud “redirects a portion of the existing royalty pool from every single legitimate rightsholder to fraudsters.”
On Hacker News, a reader laid out the mechanism for another who doubted that artists lost anything.
All listens go into a global pool and count the same amount. So if you listen 20 hours a day, you control not only the royalty payments from your subscription but the royalty payments from several other people’s subscriptions.
Spotify’s share was small. The company said in 2024 that its controls had held Mr. Smith’s earnings there to about $60,000 of the $10 million then alleged, MBW reported. Spotify polices recording royalties. Songwriting royalties travel through the MLC and the performing rights organizations, a channel those checks don’t reach, Ms. Dalugdug wrote.
How it came apart
The MLC stopped paying Mr. Smith in about March and April 2023 and confronted him, according to the indictment. It told him that in October 2021 and October 2022 almost all of the Amazon activity for his company, Smithhouse Music Publishing, had come from family-plan accounts. On March 17, 2023, a representative wrote back that “Mike categorically denies any play manipulation.” Six days later an attorney who prosecutors believe was his lawyer told the MLC that none of the works were computer-generated. “Mike is the ‘human’ author!” the email said.
The family plans showed up elsewhere too. In April 2023 the entire catalog of Taylor Swift drew 9.3 million family-plan streams on YouTube Music. Mr. Smith’s bots drew 80.9 million that month, about 8.7 times as many, prosecutors said.
On Hacker News, a reader wondered why someone careful enough to spread plays thin let the totals climb so high.
if this guy hadn’t tried to make 8 million dollars with 10k bot accounts and boosted himself straight to the top, he could have easily made a few thousand per month.
The record bears out part of that. Spreading the plays kept any single song from standing out, and the scheme outlived the distributor complaints by years. What the MLC flagged was the accounts: the share of plays from family plans and the sheer total. It was not clear from the public record what first drew the F.B.I. In February 2024, Mr. Smith boasted in an email of more than four billion streams and $12 million in royalties since 2019. On Sept. 4, 2024, prosecutors unsealed a three-count indictment, and he was arrested.
Boomy had its own trouble the year before. In May 2023, Spotify removed about 7 percent of the tracks Boomy users had uploaded over suspected artificial streaming, Forbes reported, citing The Financial Times. “Boomy is categorically against any type of manipulation or artificial streaming,” Mr. Mitchell said then. It was not clear whether any of the removed tracks were Mr. Smith’s.
The U.S. attorney’s office in Manhattan announced the charges on X the day they were unsealed.
North Carolina musician charged with music streaming fraud aided by artificial intelligence
The three counts, wire fraud, wire fraud conspiracy and money laundering conspiracy, each carried up to 20 years. Damian Williams, then the U.S. attorney, said it was “time for Smith to face the music.”
Earlier schemes
Others had found the opening. In September 2017, a month before Mr. Smith’s projection, a Spotify playlist called “Soulful Music” with 1,797 followers reached No. 35 on the service’s global chart, MBW reported. Its 467 tracks, most about 30 seconds long, the minimum for a paid play, traced back to Bulgaria. MBW estimated that 1,200 paid accounts playing on a loop could have drawn at least $288,000 a month from each of two such playlists. No one behind it was publicly identified.
Denmark reached a courtroom first. In March 2024 a district court in Aarhus sentenced a man from East Jutland to 18 months, three of them to be served, for using bots to inflate plays on 689 tracks on Spotify, Apple Music and YouSee Musik. In February 2025 the Western High Court raised the term to 24 months, still with three months to serve, after finding fraud of at least 3.5 million Danish kroner, MBW reported. The Danish Rights Alliance had first reported that case in 2018.
The BBC World Service’s Trending podcast took up the Smith case after the charges.
The argument over harm
The sentencing fight was about who got hurt. Mr. Smith’s lawyers, Noell P. Tin and Justine A. Harris, asked for probation, arguing that his effect on any one artist was “a drop in an ocean” and that “big labels” had done similar things. Their memo, filed Sept. 22, put the core of it in one sentence, MBW reported.
No individual artist or songwriter suffered any perceptible harm from Mr. Smith’s conduct.
Prosecutors answered that a diffuse loss was not a diffuse gain, since all of it went to one man. They said the 2019 Economic Times article Mr. Smith cited about label practices called that conduct “stream fraud,” and that Spotify had banned automated inflation of plays in 2017.
Their letter, from Assistant U.S. Attorneys Nicholas W. Chiuchiolo and Kevin B. Mead, described the man behind it.
For more than six years, Smith labored almost daily to perpetrate massive fraud.
The defense also said Mr. Smith “did not set out to commit a federal crime,” that he had consulted a “well-known music attorney” and that he “believed his initial efforts to be lawful,” Rolling Stone reported. His lawyers conceded he went on to talk himself into conduct he knew was wrong, including “false statements to distributors.” Prosecutors said either he had hidden facts from that lawyer or the lawyer had lied to the MLC. In an Oct. 2 letter, the defense said a witness had confirmed the lawyer “100% knew that Smith was manipulating streams.”
On Hacker News, the most-answered comment asked what law had been broken at all.
What crime did he actually commit? Using services exactly as they are offered?
The record answers that. The services were not used as offered. Mr. Smith opened accounts in invented names, paid with cards he got by telling a financial firm those names were his employees, denied fraud in writing to a distributor and, through his representatives, denied manipulation to the MLC. The count he admitted, conspiracy to commit wire fraud, rests on those deceptions, not on the bots or the A.I. songs as such. His own lawyers wrote in October that using A.I. to create songs is not inherently unlawful.
The defense’s narrower point holds up better. No single artist could show a loss, and no one was ordered repaid. Prosecutors sought no restitution because there was no list of victims, which Ms. Dalugdug called “pro rata’s legal shadow.” The Danish case left the same gap. Maria Fredenslund, chief executive of the Rights Alliance, said after the appeal that it was “deeply regrettable that the compensation claims of rights holders are not included in the case.”
Eighteen months
Judge Koeltl’s term was less than half the 46 months prosecutors sought, the bottom of a guideline range of 46 to 57 months, and shorter than the 24 months the probation office recommended. The charge carried a maximum of five years. Friends and family wrote asking that he not be separated from his children, especially his adolescent son. RZA of the Wu-Tang Clan, a guest judge on One Shot, wrote that Mr. Smith “has always acted honestly with me.”
Jamie McDonald, the U.S. attorney for the Southern District of New York, announced the sentence.
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.
His office called it the first “super intelligence-assisted” streaming fraud case. President Trump signed an executive order on Sept. 29 directing agencies to use “Super Intelligence” in place of “artificial intelligence” in official communications, IAPP reported. The office’s announcement of the plea in March, under Jay Clayton, then the U.S. attorney, had said “artificial intelligence.” Justice Department leaders notified staff of the change the day Mr. Smith was sentenced, Rolling Stone reported.
What comes next
The platforms changed their rules while the case moved. Since April 1, 2024, a Spotify track has needed 1,000 streams in the previous 12 months to earn recording royalties, and Spotify charges labels and distributors per track when it detects flagrant artificial streaming, the company said. Ms. Dalugdug calculated that Mr. Smith’s early setup, about 805 plays per song per year across all services, would have fallen under that bar on Spotify. His later fleet of up to 10,000 accounts would have cleared it, she wrote, but Spotify’s undisclosed minimum of unique listeners is harder for a finite fleet to meet. The threshold does not apply to songwriting royalties.
The supply of songs has grown. Deezer said in April that it was receiving nearly 75,000 fully A.I.-generated tracks a day, 44 percent of new uploads, that they drew 1 to 3 percent of streams and that it detected 85 percent of those streams as fraudulent, TechCrunch reported. By June the daily average was about 90,000, and Deezer said it would begin removing A.I. tracks tied to fraudulent streams, according to a July report.
A Hacker News reader argued that the problem lies in how the pool is split.
If Spotify royalties were allocated fairly a scheme like this shouldn’t be able to pull more money out than the subscriptions put in.
The reader is describing a user-centric model, in which each subscriber’s fee goes only to what that subscriber plays. By simple arithmetic, Mr. Smith’s bots would then have returned his own subscription money to him, less the platforms’ cut. Spotify’s 2024 changes kept the pooled model, and the company said the size of the pool would not change.
Mr. Mitchell has not been charged. It was not clear when Mr. Smith must report to prison. His lawyers told the court he had a job offer doing audio production for a label at $5,000 a month.
Mr. Smith nodded as the judge announced the sentence. “Thank you for your consideration on everything, Your Honor,” he said.