In a major development, Michael Smith has been arrested and charged in a three-count criminal indictment for his involvement in a fraudulent scheme that used artificial intelligence (AI) to create hundreds of thousands of songs and automated programs called "bots" to stream them billions of times. The scheme resulted in Smith fraudulently obtaining over $10 million in royalty payments. Smith was apprehended today and will face legal proceedings before a U.S. Magistrate Judge in North Carolina.

The announcement was made by Damian Williams, the U.S. Attorney for the Southern District of New York, and Christie M. Curtis, the Acting Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (FBI). Williams condemned Smith's actions, stating, "As alleged, Michael Smith fraudulently streamed songs created with artificial intelligence billions of times in order to steal royalties. 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. Today, thanks to the work of the FBI and the career prosecutors of this Office, it's time for Smith to face the music."

The indictment lays out the operation of music streaming platforms such as Amazon Music, Apple Music, Spotify, and YouTube Music. Each time a song is streamed on these platforms, individuals involved in its creation, including songwriters and musicians, receive small royalty payments. Smith created thousands of bot accounts on the streaming platforms, which he used to stream songs that he owned. By employing software, he orchestrated the continuous streaming of these songs, estimating an average of approximately 661,440 streams per day, ultimately generating projected annual royalties of $1,207,128.

To avoid detection, Smith spread his automated streams across thousands of songs, preventing suspicions from arising surrounding any specific track. He recognized that streaming manipulation on a massive scale, such as streaming a single song one billion times, would raise red flags. As a result, Smith collaborated with an AI music company CEO and a music promoter to develop an extensive catalog of AI-generated songs. These songs, provided by the CEO, were given randomized file names, and Smith created fictitious song and artist names to make them seem authentic. This approach allowed him to create the appearance of genuine streaming activity across a large number of songs.

Smith went to great lengths to deceive the streaming platforms, using false identities and agreeing to terms and conditions that prohibited streaming manipulation. He made it appear as though legitimate users were controlling the bot accounts and streaming music, while in reality, the accounts were hard-coded to stream his music billions of times. Through this scheme, Smith managed to fraudulently acquire more than $10 million in royalties.

If convicted, Smith, who resides in Cornelius, North Carolina, faces charges of wire fraud conspiracy, wire fraud, and money laundering conspiracy. Each charge carries a maximum sentence of 20 years in prison. The U.S. Attorney's Office's Complex Frauds and Cybercrime Unit is prosecuting the case.

The announcement of Smith's arrest sends a strong message about the commitment of law enforcement agencies to combatting fraud in the music industry. The FBI's Acting Assistant Director, Christie M. Curtis, emphasized this, stating, "The defendant's alleged scheme played upon the integrity of the music industry by a concerted attempt to circumvent the streaming platforms' policies. The FBI remains dedicated to plucking out those who manipulate advanced technology to receive illicit profits and infringe on the genuine artistic talent of others."

As the case unfolds, it will be up to the judge to determine the sentencing for Smith. However, the charges and evidence presented in the indictment provide a notable example of the legal repercussions awaiting those who deceptively exploit technology for financial gain.

Note: The information provided in the article is based solely on the allegations made in the indictment, and the defendant is presumed innocent until proven guilty in a court of law.