US man sentenced to 18 months for AI-generated song streaming fraud

The U.S. Department of Justice announced on October 6 that Michael Smith, a man from North Carolina, was sentenced to 18 months in prison and ordered to forfeit $8 million in illegal proceeds for using AI to fraudulently collect music royalties. According to an IT之家 report on October 8, that amount was equivalent to roughly 53.7 million yuan at the exchange rate at the time.

The announcement said that between 2017 and 2024, Smith used artificial intelligence to generate hundreds of thousands of songs. He then uploaded them to streaming platforms through more than 10,000 fake accounts created with false email addresses and illegally obtained debit cards, and used a large matrix of bot accounts to generate fraudulent plays in order to collect royalty income.

On the nature of the scheme, the reports noted that royalties are paid out of a pool to songwriters and performers in proportion to plays. As a result, streaming fraud shifts income that would have gone to songwriters and performers for legitimate plays by real users to those who use automation to fake the appearance of legitimate listening.

Tom's Hardware reported on October 8 that this was the first criminal case involving AI-assisted music streaming fraud, and put the number of bot accounts involved at 10,000. The case has now concluded, with the sentence of 18 months in prison and an $8 million fine.