Producer Scammed Millions of Dollars Through AI Music. He Was Just Arrested.
By Movieguide® Contributor
North Carolina-based music producer Michael Smith was recently arrested by the FBI for allegedly scamming music streamers out of millions of dollars by generating music with AI and automating streaming of it.
The scam had been ongoing since 2017, and Smith’s operation had grown to include multiple co-conspirators which helped generate over $10 million in revenue in seven years. Though Smith has denied any wrongdoing, prosecutors have abundant data tracking his actions and proof that he knew what he was doing was wrong.
“We need to get a TON of songs fast to make this work around the anti-fraud policies these guys are all using now,” Smith wrote to two of his co-conspirators, according to the indictment.
Smith’s operation was run by partnering with an AI music generation company that would provide him with thousands of songs to upload onto streaming sites. He, and his partners, would then create hundreds of botted accounts on these platforms and set them up to automatically stream these songs continuously.
At the peak of his operation, he was able to stream 661,440 songs per day, netting him a monthly revenue of roughly $110,000.
Multiple streaming sites had previously reported Smith for fraud and are thankful the FBI and DOJ are finally taking action against him — and setting an example for others participating in similar operations.
“The defendant’s alleged scheme played upon the integrity of the music industry by a concerted attempt to circumnavigate the streaming platform’s policies,” said Christie M. Curtis, acting assistant director of the FBI. “The FBI remains dedicated to plucking out those who manipulate advanced technology to receive illicit profits and infringe on the genuine artistic talent of others.”
“Today’s DOJ indictment shines a light on the serious problem of streaming fraud for the music industry,” added Kris Ahred, CEO of the Mechanical Licensing Collective (MLC). “As the DOJ recognized, the MLC identified and challenged the alleged misconduct, and withheld payment of the associated mechanical royalties, which further validates the importance of the MLC’s efforts to combat fraud and protect songwriters.”
Smith’s charges include wire fraud and money laundering and could face up to 20 years in prison for each charge brought against him.
- Content: +3Share:
- Content: +2