Man Charged With US$10 Million Streaming Music Scam Using Artificial Intelligence-Generated Songs
A North Carolina man has been charged with a US$10 million streaming music scam involving AI-generated songs. The FBI emphasises the gravity of the artificially inflated music streaming case. The fraudulent manipulation of streaming platforms has had an impact on the music industry.
Michael Smith, the accused, allegedly streamed these AI-generated tracks using bot accounts to illegally earn more than $10 million in royalties.
Smith, a 52-year-old musician, was apprehended and charged with three offences, according to law enforcement officials, marking a landmark case of artificially inflated music streaming. The FBI emphasised the gravity of the situation, emphasising the impact on the music industry's integrity and the exploitation of advanced technology for illegal gain.
The indictment against Smith, who lives in Charlotte, was filed in U.S. District Court in New York. It alleges that between 2017 and the present, Smith fraudulently increased his earnings by manipulating music streams on platforms such as Spotify, Amazon Music, Apple Music, and YouTube Music.
Streaming subscriptions in the United States increased 3% to 99 million in the first half of 2024, according to the Recording Industry Association of America. During this time, the retail value of streaming services increased by 4% to a record US$7.3 billion.
When a song is streamed, royalty payments are made to the songwriter, musician, and other rights holders. Smith allegedly took advantage of these payments by massively streaming songs, resulting in significant profits. The emails presented in the indictment reveal his strategic approach to avoiding detection and maximising earnings using bot accounts.
Musicians are increasingly using AI tools to create music, but there are concerns about using their work to train AI models, which could devalue music and creativity. Damian Williams, the United States Attorney, condemned Smith's actions, pointing out that millions of dollars in royalties were diverted from legitimate rights holders.
Smith began by uploading songs from an existing catalogue before moving on to AI-generated music to scale his operation. The indictment details his collaboration with unnamed co-conspirators, including an AI music company CEO and a music promoter, to carry out the scam flawlessly.
Smith is now facing charges of wire fraud conspiracy, wire fraud, and money laundering conspiracy, each with a maximum prison sentence of 20 years. Williams concluded: "It's time for Smith to face the music."
North Carolina man charged with $10 million streaming music scam using AI-generated songs
FBI highlights the severity of artificially inflated music streaming case
Music industry impacted by fraudulent manipulation of streaming platforms
Source: FORBES