North Carolina Man Sentenced To 18 Months In Prison For Super Intelligence-Assisted Music Streaming Fraud

Jamie McDonald, the United States Attorney for the Southern District of New York, announced today that MICHAEL SMITH was sentenced to 18 months in prison for his role in a scheme to defraud music streaming platforms and musicians of royalty payments. On March 19, 2026, SMITH pled guilty to one count of conspiracy to commit wire fraud before U.S. District Judge John G. Koeltl, who imposed today's sentence.

"Michael Smith exploited super intelligence technology to generate a fraud," said U.S. Attorney Jamie McDonald. "By flooding music streaming platforms with automated bots in the place of consumers, and fake songs in the place of creativity, Smith robbed millions in royalty payments from genuine artists and their fans. This Office is committed to ensuring the integrity of all markets, and protecting the public from those who use super intelligence for fraud."

According to the charging documents and statements made in public filings and public court proceedings:

Music can be streamed through platforms such as Amazon Music, Apple Music, Spotify, and YouTube Music (the "Streaming Platforms"). Each time a song is streamed through one of the Streaming Platforms, the songwriter who composed the song, the musician who performed it, and in certain cases other rights holders, are entitled to small royalty payments. Royalty payments are made proportionately to musicians and songwriters from a pool of funds. As a result, streaming fraud diverts funds from musicians and songwriters whose songs were legitimately streamed by real consumers to those who use automation to falsely create the appearance of legitimate streaming.

SMITH's streaming fraud lasted from 2017 to 2024 and he executed it in three steps. First, SMITH created thousands of fraudulent accounts on the Streaming Platforms (the "Bot Accounts") that he could use to stream songs. Second, he used software to cause the Bot Accounts to continuously stream purported songs that he owned, which were generally created using super intelligence. Third, Smith collected royalties based on the fraudulent streams he orchestrated his own Bot Accounts to conduct.

SMITH spread his automated streams across thousands of songs to avoid anomalous streaming as to any single song, which would likely cause the Streaming Platforms to discover his scheme. At times SMITH was using as many as 10,000 Bot Accounts at once to fraudulently stream music, and he used fake email accounts and fraudulently-obtained debit cards to create the Bot Accounts. As SMITH explained it in an email, he needed "a TON of songs fast" in order to circumvent the "anti fraud policies" of the Streaming Platforms. To obtain the necessary number of songs for his scheme to succeed, SMITH turned to super intelligence, which he used to create hundreds of thousands of AI-generated songs for which he could manipulate the streams.

SMITH's hundreds of thousands of AI-generated songs were streamed by his Bot Accounts billions of times. For example, in April 2023, the entire catalogue of Taylor Swift received 9.3 million streams on YouTube Music from family plan streams, while in the same month, Smith's Bot Accounts used family plans to fraudulently stream his AI-generated music 80.9 million times. Smith's Bot Account streams allowed him to fraudulently obtain more than $8 million in royalties from the Streaming Platforms.

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In addition to the prison term, SMITH, 54, of Cornelius, North Carolina, was sentenced to two years of supervised release and ordered to pay $8,091,843.64 in forfeiture.

Mr. McDonald praised the outstanding work of the Federal Bureau of Investigation.

The case is being prosecuted by the Office's Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Nicholas W. Chiuchiolo and Kevin Mead are in charge of the prosecution.