For years, the music streaming industry has known that fake streams were siphoning money away from legitimate artists, yet little meaningful action was taken. Criminal charges were rare—until March 19, when that changed in a New York federal courtroom. Michael Smith, a 54-year-old musician from Cornelius, North Carolina, became the first person in the United States to be convicted of using AI to commit streaming fraud. The scale of his seven-year scheme stunned the industry.
Smith, 54, pleaded guilty on March 19 before U.S. District Judge John G. Koeltl in New York to conspiracy to commit wire fraud. Prosecutors have described the case as the nation’s first criminal streaming fraud prosecution.
The U.S. Attorney’s Office says Smith agreed to forfeit more than $8 million in fraudulent royalties. He faces up to five years in prison and is scheduled to be sentenced on July 29. The scheme was strikingly simple yet massive in scale, and it went largely undetected for seven years.
The North Carolina resident used AI tools to churn out hundreds of thousands of low-cost songs, then created more than 1,000 bot accounts on platforms including Spotify, Apple Music, Amazon Music, and YouTube Music. The bots streamed the tracks continuously, generating plays around the clock and driving up royalty payments.
Smith didn’t funnel billions of streams into a single track—that would have triggered immediate suspicion. Instead, he distributed them across thousands of songs with bizarre titles like “Zyzomys” and “Zyme Bedewing,” released under artist names such as “Calvinistic Dust” and “Camel Edible.”
This scheme generated roughly 661,000 streams per day. With royalties averaging about half a cent per stream, it brought in approximately $3,300 daily—amounting to just over $1.2 million per year. Smith kept the operation running from 2017 until 2023, when streaming platforms and the Mechanical Licensing Collective finally uncovered his artificial streaming network.
Investigators also found out that Smith teamed up with the CEO of an AI music company, later identified as Boomy, who provided him with songs. In return, the CEO received either $2,000 per month or 15% of Smith’s revenue, whichever was more. So far, the CEO hasn’t faced any charges.
Internet Reacts as North Carolina Resident Becomes First American Convicted of AI-Driven Streaming Fraud
The story quickly sparked a wave of reactions online, with many users stunned by the scale of the situation. “This is insane, man! I still think he should be allowed to keep part of the money,” one person wrote.
Others pointed to the scale of effort behind the scheme, arguing that it was far more complex than it appeared. “Can’t imagine the cost of running this level of illegal hack,” one user commented. Another added, “He didn’t steal from artists. He stole from Spotify’s broken royalty system. Legend behavior, tbh.”
Some commenters portrayed the incident as revealing a broader flaw in the system. “He should be allowed to keep what he earned for discovering and exposing how exploitable the system is,” one person wrote. Another joked, “I spent three hours today choosing a font while this guy built a fake music empire and retired.”
Others took a broader view, questioning just how widespread the problem might be. “One person finding the loophole is the canary in the coal mine. The real question is: how many others have already figured this out and simply haven’t been caught?” one commenter wrote. Another observed, “This isn’t just fraud; it’s a preview of the chaos AI can unleash across digital industries. Fake content, fake engagement, real money—how do you regulate that?”
Streaming platforms have a limited pool of money to distribute. So when someone fabricates streams, they are effectively taking income away from legitimate artists. Michael Smith recognized this opportunity in 2017 and exploited it for seven years through AI-driven fraud. Now, North Carolina has delivered the music industry’s first criminal conviction for this type of scheme.
