Michael Smith, a 54-year-old musician from Cornelius, North Carolina, received 18 months in federal prison for running a scheme that pushed hundreds of thousands of AI-generated songs through bot accounts until they had been streamed billions of times. U.S. District Judge John G. Koeltl added two years of supervised release and ordered $8,091,843.64 in forfeiture. Prosecutors in Manhattan announced the sentence on October 6, 2026, and put the haul at more than $8 million in royalties from Spotify, Apple Music, Amazon Music and YouTube Music.
The dollar figure is smaller than the one that followed Smith’s case for two years. When he was indicted in September 2024, the government alleged more than $10 million in fraudulently obtained royalties across three felony counts. He pleaded guilty on March 19, 2026, to a single count of conspiracy to commit wire fraud, and the sentencing papers rest on the lower number.
Thousands of fake listeners on debit cards
According to the Southern District of New York’s sentencing release, Smith built thousands of fraudulent accounts on the streaming services using fake email addresses and fraudulently obtained debit cards, then ran software that made those accounts stream songs he owned, most of them generated by AI. At times as many as 10,000 of the accounts were active at once. To keep any single track from looking abnormal, he spread the plays across thousands of different songs, and in one email he said he needed “a TON of songs fast” to get around the platforms’ “anti fraud policies.”
The prosecutors’ scale comparison is hard to ignore. In April 2023, Taylor Swift’s entire catalogue drew 9.3 million YouTube Music streams from family plans, while Smith’s bot accounts used family plans to stream his AI-generated tracks 80.9 million times in the same month.
The 2024 indictment lays out where the catalogue came from. An unnamed co-conspirator described as the chief executive of an AI music company supplied the tracks under a February 2019 agreement that paid that company the greater of $2,000 a month or 15 percent of streaming revenue, and a music promoter who worked with both men wrote in an email that the model had been proven to work. Smith also moved $1.3 million in royalties into an account under the name SMH Entertainment to keep the debit cards that funded the bot accounts topped up, according to the same document, which contains allegations that Smith later resolved by pleading guilty to the conspiracy count.
Three numbers for one royalty stream
Three different totals circulated, and each belongs to a different party. The September 2024 charging announcement from then-U.S. Attorney Damian Williams alleged more than $10 million, with each of the three counts carrying a 20-year maximum. The sentencing release says Smith fraudulently obtained more than $8 million and forfeited $8,091,843.64, a sum that sits just above the lower threshold and is the only figure the court record adopts.
The third number is Smith’s own. BleepingComputer’s account of the case quotes a February 2024 email in which he claimed his music had produced “over 4 billion streams and $12 million in royalties since 2019.” That sentence is a boast in the government’s evidence, not a finding, and the sentence handed down rests on the smaller, proven amount.
BleepingComputer also reports that the bots connected through VPNs to blunt anti-fraud systems and that in 2017 Smith operated 52 cloud service accounts, each hosting 20 bot accounts, a setup that grew by 2024 into the five-figure fleet the indictment describes.
A shared pool that fake streams drain
Streaming royalties are not paid per play out of thin air. The sentencing release explains that royalty payments are made proportionately to musicians and songwriters from a pool of funds, so any money earned by a bot-played track is money subtracted from everyone else in the pool. Spotify’s own artificial streaming policy says streams that do not reflect genuine listening intent dilute the royalty pool and shift revenue away from legitimate artists, and that since April 1, 2024 it has charged labels and distributors per track when flagrant artificial streaming is detected.
U.S. Attorney Jamie McDonald framed the case as a fraud on that pool. “Michael Smith exploited super intelligence technology to generate a fraud,” he said, adding that Smith flooded the platforms “with automated bots in the place of consumers” and “robbed millions in royalty payments from genuine artists and their fans.” Assistant U.S. Attorneys Nicholas W. Chiuchiolo and Kevin Mead, of the office’s Complex Frauds and Cybercrime Unit, handled the prosecution, and the FBI investigated.
What remains on the record is arithmetic: 18 months to serve, $8,091,843.64 to forfeit, and a bot operation that, by the prosecutors’ April 2023 comparison, out-streamed Taylor Swift’s whole catalogue on YouTube Music family plans by roughly 8.7 to 1.
This article was produced with the assistance of AI and reviewed by Morning Overview editors prior to publication.
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