A US federal judge has sent a musician to prison for gaming music streaming with bots and AI — the first criminal sentence of its kind in the United States.

Michael Smith, 54, of Cornelius, North Carolina, was sentenced on Tuesday in the Southern District of New York to 18 months in prison followed by two years of supervised release, and ordered to pay roughly $8.1 million in restitution. Prosecutors had asked for 46 months; the defence argued for no prison time. He had pleaded guilty to conspiracy to commit wire fraud.

Between 2017 and 2024, Smith ran up to 10,000 bots on servers outside the US whose only job was to play his own tracks on Amazon, Apple, Spotify and YouTube over and over to generate royalties. Because free accounts pay out less, he created thousands of "family plan" subscriptions under invented names and paid for them with debit cards issued in those fake employees' names by a company that supplies cards to corporate staff — more than $1.3 million in subscription fees, according to prosecutors.

His own catalogue was far too small to pass unnoticed, so he licensed other artists' music — and then turned to services that generate audio with AI, which supplied up to 10,000 new tracks a month. He invented artist names for them and told distributors, platforms and collecting societies he had composed and recorded everything himself. In one month, April 2023, his bots racked up 80.9 million streams of his AI-generated music — against 9.3 million for the entire Taylor Smith catalogue. One platform spotted the pattern and shut his accounts.

Prosecutors say the scheme brought him more than $8 million in royalties; he reportedly bragged about $12 million. The Justice Department described it as its first-ever criminally charged AI-assisted music streaming fraud. Even US authorities were unsure that manipulating play counts was itself a crime — it has usually been treated as a contract breach — so the charge leaned on the lies used to trigger payments.

Only one comparable case is known, in Denmark in 2024, where a 53-year-old received 18 months for the same technique without AI; on appeal that sentence was extended to two years and the fine increased.

The fraud would be easy to deter. For a start, simply not paying royalties on AI-generated music would help a great deal. The deeper problem is the payout model: streaming services generally pay revenue shares based on each recording's "market share" of the total pot rather than a fixed amount per play, which lets subscribers generate more royalties than they contribute. The fix would be user-centric licensing, where payouts follow each user's own subscription and listening behaviour. Deezer has campaigned for it for years, and SoundCloud, along with Warner Music Group, has moved some agreements in that direction.

Sources