North Carolina man gets 18 months in first federal AI music streaming fraud case

A North Carolina man who turned artificial intelligence and an army of fake listeners into a royalty machine is headed to federal prison. Michael Smith, 54, of Cornelius, was sentenced to 18 months on October 6, 2026, in Manhattan federal court. The case has been described as the first federal criminal prosecution tied to AI-assisted music streaming fraud. How the scheme worked Smith used AI tools to produce hundreds of thousands of songs. He then played them to nobody in particular, over and over, through bot accounts. Federal prosecutors said he used as many as 10,000 bot accounts to stream his catalog. Those accounts were built to inflate play counts across major services, including Spotify, Apple Music, Amazon Music and YouTube Music. The operation ran from 2017 to 2024. Over that stretch, the fraud generated over $8 million in royalties. In April 2023, Smith’s bot accounts produced 80.9 million streams on YouTube Music alone. For comparison, Taylor Swift’s catalog drew 9.3 million streams on the same platform that month. The sentence and the forfeiture US District Judge John G. Koeltl handed down 18 months in prison, followed by two years of supervised release. Smith also forf...