AI, Bots and Streaming Royalties: The Michael Smith Case

On October 6, 2026, a federal judge in Manhattan sentenced Michael Smith to 18 months in prison after he pleaded guilty to one count of conspiracy to commit wire fraud on March 19, 2026. The conviction concluded a case that had been built from electronic records, bank transfers, and platform data, and it names Smith, a 54-year-old resident of Cornelius, North Carolina, as the central actor in a large-scale fraud.

Investigators found that, from 2017 through 2024, Smith used automated programs known as 'bots' to run thousands of streaming accounts and that he turned to advanced generative tools to produce hundreds of thousands of songs. At times he operated as many as 10,000 Bot Accounts simultaneously, and those accounts streamed his AI-generated tracks billions of times, which allowed him to claim more than eight million dollars in royalties and to move funds through debit cards tied to the operation.

In one striking example from April 2023, Smith’s Bot Accounts used family-plan streams to play his tracks 80.9 million times while another popular artist’s family-plan streams on the same service totaled 9.3 million; this pattern helped conceal the fraud by spreading plays across many tracks. "By flooding music streaming platforms with automated bots in the place of consumers, and fake songs in the place of creativity, Smith robbed millions in royalty payments from genuine artists and their fans."

The court ordered Smith to forfeit $8,091,843.64 and to serve two years of supervised release after prison, and it emphasized that streaming platforms such as Amazon Music, Apple Music, Spotify, and YouTube Music were used as the venues for the scheme. If similar automation is not detected, the fixed monthly royalty pools that pay artists could continue to be distorted, and legitimate musicians may keep losing income as a result.