Who is Michael Smith and what did he plead guilty to?

Michael Smith, 54, of Cornelius, North Carolina, pleaded guilty on March 19, 2026 to conspiracy to commit wire fraud. He used AI-generated songs and 1,040 bot accounts to steal $8,091,843.64 in streaming royalties from Spotify, Apple Music, Amazon Music, and YouTube Music over 7 years. Rolling Stone has the full timeline of how the scheme was built and investigated.

How did Michael Smith steal $8 million from streaming platforms using AI?

Smith sourced AI-generated tracks at up to 10,000 songs per month through a commercial agreement with an AI music company. He uploaded hundreds of thousands of tracks and used 1,040 bot accounts to stream them automatically, generating 661,440 fake streams per day. This is an extreme version of the same AI artists on Spotify dynamic where synthetic streaming activity is nearly impossible for platforms to separate from legitimate plays.

What is the Mechanical Licensing Collective and how did it catch the fraud?

The Mechanical Licensing Collective is the US Copyright Office-designated nonprofit administering blanket mechanical licenses for streaming and digital downloads under the Music Modernization Act of 2018. It caught Smith’s fraud by identifying an abnormal volume of tracks and streams tied to his accounts, halted payments in early 2023, and launched the investigation that led to his September 2024 indictment.

How big is AI streaming fraud across the industry?

According to Beatdapp, streaming fraud costs the industry $2 billion yearly, roughly 10% of global streaming revenue. Smith’s case is the first federal US prosecution, but AI fake songs on Spotify have been appearing on real artists’ profiles for years. TuneCore, DistroKid, and CD Baby formed the Music Fights Fraud Alliance in June 2023 to share fraud databases across distributors.

How are streaming platforms detecting AI fraud now?

Detection varies widely by platform. Deezer flags 60,000 AI-generated tracks daily, but Spotify, Apple Music, and Amazon Music did not detect Smith’s operation over 7 years. The Smith case suggests the major platforms rely on third-party bodies like the MLC rather than internal systems to catch fraud at this scale.

First AI Music Streaming Fraud Guilty Plea: $8M Case

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