A federal court in New York sentenced 54-year-old Michael Smith to 18 months in prison for a sophisticated music streaming fraud.
The scheme, which operated from 2017 until 2024, relied on a high-volume automated infrastructure. Michael Smith, a resident of North Carolina, purchased thousands of email addresses to create fraudulent accounts on platforms including Spotify, Apple Music, and Amazon Music. He then used artificial intelligence to produce large quantities of randomly titled music tracks, which he uploaded to these services. To maintain the illusion of popularity, he occasionally utilized thousands of automated accounts simultaneously.
To ensure these tracks generated revenue, Smith deployed networks of automated bots. By 2019, his operation had achieved a scale where he was earning a significant monthly income. Prosecutors stated that at his peak, Smith was capable of generating hundreds of thousands of streams daily, resulting in roughly $3,300 in illicit daily earnings. By 2024, Smith boasted in an email that he had successfully funneled billions of streams into his accounts, yielding millions of dollars in royalties since 2019. This massive influx of fake data was designed specifically to trick platform algorithms into distributing payments to his accounts rather than to authentic musicians.
Sentencing and Legal Precedent in New York
In March, Smith entered a guilty plea for conspiracy to commit electronic fraud. In addition to his 18-month prison term, Smith faces two years of supervised release.
During the proceedings, Smith’s defense team attempted to minimize the impact of his actions, arguing that his fraud caused no direct harm to individual listeners. According to reports, they claimed that the negative effect on artists was a drop in the ocean
compared to the total volume of the global music industry. They further argued that no specific victim suffered actual loss.
Prosecutors rejected this characterization, emphasizing the systemic harm caused by the fraud.
“From flooding streaming music platforms with fake songs instead of creativity, Smith stole millions of dollars in royalty payments from real artists and their fans.”
Jamie McDonald, federal prosecutor
Music Industry Leaders Praise Court Ruling on Streaming Fraud
The Recording Industry Association of America (RIAA) welcomed the ruling, noting how it could affect the wider creative economy. The organization stated that streaming fraud directly harms songwriters, performers, and their label partners by siphoning money meant for legitimate creators. They noted that the court’s recognition of the harm caused by this behavior is a vital step in protecting the industry.
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