After pleading guilty, a 54-year-old North Carolina man, Michael Smith, was sentenced to 18 months in prison for using artificial intelligence to generate songs for a scheme that stole millions from music streaming platforms.
In a press release Tuesday, the US Department of Justice said that Smith is the first American criminally charged with AI-assisted streaming fraud.
First charged in 2024, Smith successfully ran the scheme for seven years without detection.
Starting in 2017, Smith began using fake email accounts and “fraudulently obtained debit cards” to create “thousands of fraudulent accounts” on services including Amazon Music, Apple Music, Spotify, and YouTube Music, the DOJ said. He then employed software that pushed the bots to continuously stream songs that he claimed to own, which the DOJ said were AI-generated.
Smith’s streaming fraud didn’t just hurt platforms but genuine artists who share royalty pools on streaming services, the DOJ claimed. By cutting into that pool, Smith reduced royalties across the board. Therefore, on top of serving 18 months in prison, he must forfeit the $8,091,843.64 that he claimed through his AI scheme, the court ruled.
For Smith, the outcome likely feels outsized, as a letter from his lawyers prior to sentencing urged the court that the DOJ should not be punishing one man for the “ills of an industry.” Since this is the DOJ’s first prosecution of this kind, Smith’s legal team suggested officials were making an example of Smith, while knowing that he did not actually pocket $8 million.
Instead of jail time, Smith fought for a probation sentence, noting that he was “profoundly sorry.” He further explained that he’d been offered a job that paid $5,000 per month to do “audio production, mixing, mastering, and recording for a record label.” By requiring jail time, the DOJ would only serve to delay Smith’s ability to pay back the forfeiture, his lawyers suggested.
The DOJ disagreed, though, telling the court that Smith engaged in increasingly deceptive tactics to sustain his artificial streaming, lied to cops when confronted, and needed a stronger sentence for deterrence.
“For years, Smith orchestrated a sophisticated fraudulent scheme that stole millions of dollars in musical royalties from rights holders,” the DOJ said. “The Court should impose a sentence that adequately punishes the defendant for his fraud scheme and sends a message to others that streaming fraud will be met with significant punishment.”
Ashley BelangerSenior Policy Reporter
Ashley BelangerSenior Policy Reporter
Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.
Source: arstechnica.com
