NC man pleads guilty to AI streaming fraud scheme

AI streaming scam mastermind cops a plea that could lock him up for years while costing him millions.

Michael Smith's guilty plea

• Michael Smith admits conspiracy to commit wire fraud.
• Cornelius, North Carolina, man faces up to five years in prison.
• He agrees to forfeit over eight million dollars.
• Sentencing set for July twenty-nine in New York.

Fraud scheme breakdown

• Smith pumped out thousands of AI-generated fake tracks.
• Bots streamed his songs billions of times across platforms.
• Amazon Music, Spotify, Apple Music, and YouTube Music are targeted.
• Operation peaked at over six hundred thousand daily streams.

Royalties theft impact

• Fraudulent payouts exceeded eight million dollars total.
• Real artists lost millions in diverted streaming royalties.
• Bots spread plays to dodge platform fraud detectors.
• AI helped churn out hundreds of thousands of songs fast.

Investigation fallout

• Mechanical Licensing Collective spotted suspicious volume early.
• MLC challenged Smith and blocked improper payouts.
• DOJ credits MLC for key role in fraud detection.
• Unnamed co-conspirators aided AI track production.