Governance, Risk and Compliance

NC Man Faces AI-Fraud Music Streaming Charges

Indictment reveals theft of one billion email addresses from ESPs, three charged

North Carolinian Michael Smith has been indicted on fraud charges for his involvement in music streaming fraud involving the playing of artificial intelligence-crafted songs on Spotify and Apple Music to amass millions worth of royalties, SC Media reports.

Thousands of bot accounts have been leveraged by Smith to stream the AI-crafted music, from which he was able to obtain more than $10 million in royalties, according to the indictment.

Smith — who was also alleged to have conspired with three others, including an AI firm CEO who assisted in music generation — could be imprisoned for up to 20 years for each of the three counts of fraud he faces.

"As alleged, Michael Smith fraudulently streamed songs created with artificial intelligence billions of times in order to steal royalties. Through his brazen fraud scheme, Smith stole millions in royalties that should have been paid to musicians, songwriters, and other rights holders whose songs were legitimately streamed," noted U.S. Attorney Damian Williams.

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