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Yesterday, the FBI raided the North Carolina home of a musician named Michael Smith and arrested Smith. Now, federal authorities are charging Smith with money laundering, wire fraud, and conspiracy to commit wire fraud; he faces as much as 60 years in prison. According to the feds, Smith used bot accounts to stream AI-generated music, a practice that allegedly brought in more than $10 million.
Variety reports that the 52-year-old Michael Smith is accused of creating thousands of bot accounts on streaming services like Spotify. With those accounts, Smith allegedly streamed music that he owned, figuring out ways around the services’ fraud-detection programs while using AI to crank out as much music as possible. Smith’s indictment claims that he wrote an email to two co-conspirators, saying, “We need to get a TON of songs fast to make this work around the anti fraud policies these guys are all using now.”
Prosecutors say that Smith worked with an AI service and a music promoter to generate hundreds of thousands of pieces of music and that he bought email accounts and used VPNs to keep the services from learning that he was doing everything out of his house in Cornelius, North Carolina. The indictment also says that Smith lied to royalty distributors, with his representative telling the Mechanical Licensing Collective that his works are “human-authored.”
According to WBTV News in North Carolina, Michael Smith’s indictment claims that he ran his scam from 2017 until this year, generating more than 660,000 streams a day and bringing in royalties of more than $1 million per year. Here’s that report:
That seems like the future, doesn’t it? Fake listeners listening to fake music on a bot farm, as different companies automatically shuffle around whatever meager royalties that they generate. What I want to know is: Can major labels run some version of this scam, if they carefully skirt the illegal techniques that Michael Smith is accused of employing?