Michael Smith wants probation instead of prison after stealing $8 million through AI streaming fraud. His lawyers filed a sentencing memo in Manhattan federal court arguing that individual artists suffered immeasurable losses from billions of fake streams.
Defense claims harm was insignificant because big labels allegedly do similar things. They cite his clean record, good character references, and family impact as reasons Judge John G. Koeltl should avoid incarceration. Sealed documents protect third-party health data while public versions remain redacted.
Smith pleaded guilty to wire fraud conspiracy carrying a maximum of five years. Federal guidelines suggest 46 to 57 months, but probation officers recommended only 24. He must forfeit $8,091,843.64 under his plea deal. Prosecutors have not yet submitted their own sentencing arguments.
This case marks the first US criminal prosecution for AI-assisted streaming fraud. Industry leaders call it theft from finite royalty pools that diverts income from legitimate creators. Denmark recently sentenced a similar offender to 24 months for bot-inflated streams across 689 tracks.
Defense claims harm was insignificant because big labels allegedly do similar things. They cite his clean record, good character references, and family impact as reasons Judge John G. Koeltl should avoid incarceration. Sealed documents protect third-party health data while public versions remain redacted.
Smith pleaded guilty to wire fraud conspiracy carrying a maximum of five years. Federal guidelines suggest 46 to 57 months, but probation officers recommended only 24. He must forfeit $8,091,843.64 under his plea deal. Prosecutors have not yet submitted their own sentencing arguments.
This case marks the first US criminal prosecution for AI-assisted streaming fraud. Industry leaders call it theft from finite royalty pools that diverts income from legitimate creators. Denmark recently sentenced a similar offender to 24 months for bot-inflated streams across 689 tracks.
