On March 20, the U.S. Attorney for the Southern District of New York announced that Michael Smith, a resident of Cornelius, North Carolina, pleaded guilty to involvement in a streaming royalty fraud case. According to the indictment and court statements, Smith used AI to generate hundreds of thousands of songs in bulk and used automated programs—"bot accounts"—to perform billions of fake plays on these songs to simulate real user listening behavior. The streaming platforms involved included major platforms such as Amazon Music, Apple Music, Spotify, and YouTube Music.
Because platform royalties are distributed to rights holders from a public royalty pool based on play count, large-scale fraudulent traffic diverts legitimate creators' rightful royalties to fraudsters. To evade platform detection of abnormal traffic, Smith distributed bot play counts across thousands of songs, deliberately lowering the peak play count for each song. Through these methods, he fraudulently obtained over $8.09 million in royalties.
Smith pleaded guilty in court to conspiracy to commit wire fraud and agreed to forfeit $8,091,843.64. This charge carries a maximum sentence of five years in prison, and formal sentencing is scheduled for July 29, 2026.
