FBI arrests American musician who used Bot streams to generate $10M in royalties

The FBI has arrested a musician from the United States for allegedly orchestrating a sophisticated fraud scheme that utilized artificial intelligence and bots to embezzle $10 million in royalties.

According to the agency, Michael Smith employed AI technology to produce hundreds of thousands of songs generated by artificial intelligence.

Legal documents indicate that Smith subsequently deployed automated bots to stream these tracks billions of times. The fraudulent activities reportedly took place from 2017 to 2024.

In 2018, he collaborated with the CEO of an undisclosed AI music firm and a music promoter to create the extensive catalogue of songs necessary for the operation.

Emails acquired by the FBI reveal that Smith evaded detection by generating numerous smaller streams, understanding that streaming a single track excessively would attract scrutiny from the platforms.

He estimated that he could leverage a vast number of bot accounts to achieve over 661,000 streams daily across various digital services, resulting in annual royalties exceeding $1.2 million.

The AI-generated songs were assigned randomly created titles and artist names prior to being streamed. By manipulating these streaming statistics through bots and deceiving the streaming services, the FBI alleges that Smith managed to misappropriate $10 million.

The 52-year-old faces charges of wire fraud and conspiracy to commit money laundering, each of which carries a potential maximum sentence of 20 years in prison.

“Through his brazen fraud scheme, Smith stole millions in royalties that should have been paid to musicians, songwriters, and other rights holders whose songs were legitimately streamed,” said US attorney Damian Williams.

“Today, thanks to the work of the FBI and the career prosecutors of this office, it’s time for Smith to face the music.”

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