AI music streaming fraud case ends with 18-month prison sentence
A Manhattan federal judge sentenced Michael Smith after his guilty plea in a bot-driven royalty scheme that also used AI-generated songs.
Sentence after a guilty plea
A Manhattan federal judge sentenced Michael Smith to 18 months in prison on October 6, followed by two years of supervised release, Rolling Stone reported from the hearing. Smith had pleaded guilty in March to conspiracy to commit wire fraud. He also previously agreed to forfeit $8 million under his plea agreement, according to the publication. Billboard separately reported the sentence and said the scheme produced more than $8 million in royalties. The sentence is a completed court action, not a new allegation or an estimate of a future penalty.
What AI did and did not do
Prosecutors said Smith used automated accounts to generate fraudulent plays of music he controlled, including AI-generated tracks, and collect streaming payouts. Rolling Stone reported that the conduct began before the AI-song portion of the scheme; it also involved Smith’s own music. AI helped supply more tracks, while bots inflated the play counts. The conviction concerns fraud against streaming royalty systems, not the legality of generating songs with AI. Smith’s lawyers sought probation and disputed how much harm each individual artist suffered, while prosecutors sought a longer prison term. The case shows a concrete use of generative tools in a payout scam, but the reviewed reports do not establish that AI generation alone caused the loss.