A North Carolina man named Michael Smith, 52, has been arrested by the Department of Justice (DOJ) on charges related to an elaborate seven-year scheme involving AI-generated music. fake bandsand fraudulent streams. Smith allegedly used artificial intelligence to create hundreds of thousands of fake songs, manipulated streaming platforms to generate fraudulent streams, and earned more than $10 million in royalties through illegal means. He now faces charges of wire fraud and money laundering, each carrying a maximum sentence of 20 years.
The Justice Department press release explains that Smith worked with two unnamed co-conspirators, including a music promoter and the CEO of an AI-powered music company, to create and upload AI-generated music to platforms such as Spotify, Apple MusicAmazon Music and YouTube Music. Smith allegedly used bots to play these fake songs billions of times, inflating the number of plays and turning them into royalty payments. His manipulation of streaming platforms allowed him to exploit their anti-fraud systems and evade detection for years.
Emails uncovered by researchers revealed the inner workings of the scheme. In one 2018 email, Smith urged his co-conspirators to quickly produce a large number of songs to evade anti-fraud policies the platforms were enforcing. The AI-powered music company’s CEO responded by periodically providing “thousands of songs” with random filenames, such as “n_7a2b2d74-1621-4385-895d-b1e4af78d860.mp3.” Smith then renamed these files with more human-sounding song titles like “Zygotes” and “Zyme Bedewing.” The fake artists associated with these tracks had similarly peculiar names, including “Calvin Mann,” “Calorie Event,” and “Calypso Xored.”
The scheme involved generating massive amounts of low-quality AI-generated “instant music” designed solely to exploit streaming platforms’ royalty systems. Bots were used to play the songs billions of times without any actual human listeners, resulting in substantial payouts for Smith and his co-conspirators.
Despite overwhelming evidence presented by the Justice Department, including emails and transmission data manipulation, Smith has denied all allegations. In a statement to the New York Times, he expressed disbelief and outrage, claiming there was “no fraud” involved and questioning how he could appeal the charges.
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