Title: North Carolina Musician Indicted for $10 Million Streaming Fraud Scheme

In a shocking turn of events, North Carolina musician Michael Smith has been indicted for orchestrating a massive streaming fraud scheme, allegedly collecting over $10 million in royalty payments from major platforms such as Spotify, Amazon Music, Apple Music, and YouTube Music. Smith, along with an unnamed music promoter and the CEO of an AI music company, fraudulently inflated music streams on digital platforms between 2017 and 2024 with the help of AI-generated songs and thousands of automated bots.

According to court documents, Smith acquired hundreds of thousands of songs created through artificial intelligence (AI) from a coconspirator and uploaded them onto popular streaming platforms. To execute the scheme undetected, he utilized virtual private networks (VPNs) to mask the identity of his bots. In an email dated October 4, 2018, Smith explicitly mentioned the need for a large volume of content with small amounts of streams in order to bypass the platforms' anti-fraud measures.

At the peak of his operation, Smith allegedly employed over 1,000 bot accounts across various platforms to artificially boost the number of streams. In an email dated October 20, 2017, Smith detailed the financial breakdown, indicating that he operated 52 cloud services accounts, each with 20 bot accounts, totaling 1,040 bots. With each bot streaming approximately 636 songs per day, Smith estimated that his scheme would generate around 661,440 streams daily.

Calculating at an average royalty rate of half a cent per stream, Smith projected daily earnings of $3,307.20, monthly earnings of $99,216, and annual earnings exceeding $1.2 million. The manipulation of streaming data allowed Smith to fraudulently collect more than $10 million in royalty payments after his bots streamed hundreds of thousands of AI-generated songs billions of times. In a boastful email sent in February 2024, he claimed his songs had generated "over 4 billion streams and $12 million in royalties since 2019."

U.S. Attorney Damian Williams expressed outrage over Smith's audacious fraud scheme, stating, "Through his brazen fraud scheme, Smith stole millions in royalties that should have been rightfully paid to musicians, songwriters, and other rights holders whose songs were legitimately streamed."

As a result, Smith now faces charges of wire fraud, wire fraud conspiracy, and money laundering conspiracy, each carrying a maximum sentence of 20 years in prison. Authorities are determined to ensure that justice is served and that musicians and rights holders receive the royalties they are rightfully owed.

The case serves as a stark reminder of the challenges posed by the digitization of the music industry and the importance of robust anti-fraud measures to protect the rights and earnings of artists and creators.