A US man has been arrested by the Federal Bureau of Investigations (FBI) for earning more than $10 million (£7.6m) in music-streaming royalties using hundreds of thousands of AI-generated tracks that he streamed to fake listeners.
Michael Smith, 52, of North Carolina, devised a “brazen” scheme to publish thousands of tracks per week on music-streaming services, playing them billions of times using fake bot accounts he programmed, according to an unsealed indictment.
After initially trying to produce large numbers of songs himself or with other artists, Smith teamed with the unnamed chief executive of an AI music company and a music promoter who supplied him with a huge volume of fake songs over a period of seven years, the indictment said.
“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 for the Southern District of New York Damian Williams.
‘Instant music’
Smith was arrested last week on charges including wire fraud, wire fraud conspiracy and money laundering conspiracy, with prosecutors saying it is the first case of the kind they have handled.
Prosecutors said that following their investigation, which involved the FBI, Smith was set to “face the music”.
The fake tracks would arrive to Smith with names such as n_7a2b2d74-1621-4385-895d-ble4af78d860.mp3, and he would assign them song and creator names such as “Zygopteris”, “Zygopteron”, “Zygopterous” or “Zygosporic”, prosecutors said.
Smith’s fake band names included “Callous Post”, “Calorie Screams” and “Calvinistic Dust”, with tracks named “Zygotic Washstands”, “Zymotechnical” and “Zygophyllum”.
Smith created as many as 10,000 streaming accounts using email addresses he purchased online, eventually outsourcing the process to paid assistants.
He created software to stream his songs to different computers, making it appear that listeners were tuning in from various locations, prosecutors said.
Michael Smith is being charged with three counts of wire fraud, wire fraud conspiracy and money laundering conspiracy.
The Justice Department in a news release, explained that each offense carries a maximum sentence of 20 years imprisonment.
“As alleged, Michael Smith fraudulently streamed songs created with artificial intelligence billions of times to steal royalties.”
Damian Williams, U.S. Attorney in the release, said, “Through his brazen fraud scheme, Smith stole millions in royalties that should have been paid to other rights holders whose songs were legitimately streamed.
“Thanks to the FBI and the career prosecutors of this Office, it’s time for Smith to face the music.”