Man Pleads Guilty to Using AI to Generate $8 Million in Fraudulent Streaming Music Royalties

A North Carolina antheral pleaded guilty Thursday to a national complaint tied to a strategy that utilized artificial quality and automated accounts to cod much than $8 cardinal successful euphony streaming royalties, according to the U.S. Department of Justice.

Michael Smith pleaded blameworthy to conspiracy to perpetrate ligament fraud successful the Southern District of New York pursuing a yearslong investigation. He agreed to forfeit the royalty payments and faces up to 5 years successful prison.

“Michael Smith generated thousands of fake songs utilizing artificial quality and past streamed those fake songs billions of times,” U.S. Attorney Jay Clayton said successful a statement.

Sentencing is scheduled for July 29.

The lawsuit comes arsenic AI-generated euphony tools person go wide available, allowing users to make songs with vocals, lyrics, and instrumentation from elemental prompts. Platforms similar Suno, Udio, and Google’s Lyria person accelerated production, making it imaginable to make ample catalogs of tracks astatine scale. At the aforesaid time, the exertion has raised questions astir copyright, ownership, and however streaming platforms grip AI-generated content.

In January, Rolling Stone reported that Smith had spent years pursuing a euphony career, including charting songs and moving with manufacture collaborators, earlier investigators tied him to the strategy to manipulate streaming services.

Streaming services, including Spotify, Apple Music, Amazon Music, and YouTube Music, administer royalty payments based connected play counts, creating an inducement to inflate streams.

When helium was archetypal charged successful September 2024, national prosecutors said Smith had created thousands of accounts connected streaming platforms to artificially play songs helium owned, utilizing bundle to make astir 661,440 streams per time and astir $1.2 cardinal successful yearly royalties. He was released connected a $500,000 enslaved the pursuing month.

“To get the indispensable fig of songs for his strategy to succeed, Smith turned to artificial intelligence, which helium utilized to make hundreds of thousands of AI-generated songs for which helium could manipulate the streams,” prosecutors said.

Rather than ore connected a tiny fig of tracks, Smith dispersed streams crossed a ample catalog. Prosecutors said the attack was intended to debar detection systems that emblem irregular activity. The catalog included some his ain recordings and hundreds of thousands of AI-generated tracks, allowing the cognition to scale.

“Although the songs and listeners were fake, the millions of dollars Smith stole was real,” Clayton said. “Millions of dollars successful royalties that Smith diverted from real, deserving artists and rights holders. Smith’s brazen strategy is over, arsenic helium stands convicted of a national transgression for his AI-assisted fraud.”

Attorneys for Smith did not instantly respond to requests for remark by Decrypt.