A North Carolina man may spend years behind bars for running an AI scheme that defrauded music streaming platforms of millions in royalty payments.
The United States Attorney for the Southern District of New York, Jay Clayton, says 54-year-old Michael Smith has pleaded guilty to one count of conspiracy to commit wire fraud for using bots and AI-generated music to drain $8 million in royalties from streaming platforms.
Clayton says Smith used AI to generate music and automated bots to stream the songs billions of times. According to the US attorney, Smith created thousands of bot accounts and hundreds of thousands of AI-generated songs to avoid detection. Clayton also says that Smith’s actions diverted funds from songwriters and musicians whose songs were legitimately streamed by real consumers.
“Michael Smith generated thousands of fake songs using artificial intelligence and then streamed those fake songs billions of times. Although the songs and listeners were fake, the millions of dollars Smith stole were real. Millions of dollars in royalties that Smith diverted from real, deserving artists and rights holders. Smith’s brazen scheme is over, as he stands convicted of a federal crime for his AI-assisted fraud.”
Smith could spend a maximum of five years in prison and was ordered to pay $8,091,843.64 in forfeiture. His sentencing is slated for July 29th.
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