Bots, Fake Songs and Billions of Streams: North Carolina Man Gets 18 Months for AI Music Royalty Fraud

Published Oct. 7, 2026. Case statuses are current as of that date.

Streaming services pay royalties out of a shared pool, divided according to how often each song is played. That means every fake play takes a sliver of money away from real musicians and songwriters. Federal prosecutors say a North Carolina man exploited that system for seven years, using thousands of bot accounts to play hundreds of thousands of AI-generated songs billions of times [1].

On Oct. 6, 2026, Michael Smith, 54, of Cornelius, North Carolina, was sentenced in Manhattan federal court to 18 months in prison, followed by two years of supervised release, and was ordered to pay $8,091,843.64 in forfeiture, the U.S. Attorney's Office for the Southern District of New York announced [1]. Smith pleaded guilty March 19, 2026, to one count of conspiracy to commit wire fraud before U.S. District Judge John G. Koeltl, who imposed the sentence [1]. BleepingComputer reported that he was indicted in September 2024 [2].

Important: Smith has pleaded guilty and been sentenced. Court documents described in news coverage refer to others who allegedly helped him; they are not named in the government's announcement and are not named here.

How the scheme worked

According to the government's charging documents and public court filings, as summarized by the U.S. Attorney's Office, the fraud ran from 2017 to 2024 and worked in three steps [1]:

1. Bot accounts. Smith created thousands of fraudulent accounts on platforms including Amazon Music, Apple Music, Spotify and YouTube Music, using fake email accounts and fraudulently obtained debit cards. At times he ran as many as 10,000 bot accounts at once.
2. Automated listening. He used software to make the bot accounts continuously stream songs he owned, which were generally AI-generated.
3. Collecting royalties. He then collected royalties based on those fake streams.

To avoid detection, prosecutors say, Smith spread the plays across thousands of songs so no single track showed suspicious activity. As he put it in an email, he needed "a TON of songs fast" to get around the platforms' "anti fraud policies." He turned to AI to create hundreds of thousands of songs [1].

BleepingComputer, citing court documents, reported that the bots connected through virtual private networks, and that an Oct. 20, 2017, email Smith sent himself described running 52 cloud service accounts with 20 bot accounts each [2].

The scale

The government gave one comparison: in April 2023, Taylor Swift's entire catalog received 9.3 million family-plan streams on YouTube Music, while in the same month Smith's bot accounts used family plans to stream his AI-generated music 80.9 million times [1].

Prosecutors say the fake streams brought Smith more than $8 million in royalties [1]. BleepingComputer's headline puts the figure at $10 million, and it reported that in a February 2024 email, Smith told accomplices the songs had generated "over 4 billion streams and $12 million in royalties since 2019" [2]. The forfeiture order, $8,091,843.64, is the figure set by the court [1].

"By flooding music streaming platforms with automated bots in the place of consumers, and fake songs in the place of creativity, Smith robbed millions in royalty payments from genuine artists and their fans," said U.S. Attorney Jamie McDonald [1].

Who gets hurt

Because royalties are paid proportionately from a pool, the U.S. Attorney's Office explained, streaming fraud diverts money from musicians and songwriters whose songs were streamed by real listeners to people who fake the appearance of legitimate streaming [1]. The losers aren't only big platforms; they include independent artists counting on fractions of a cent per play.

Red flags for musicians and listeners

For artists and labels:

• Promoters or "playlist services" that guarantee a specific number of streams for a fee. Buying artificial plays can put your own catalog and royalties at risk under platform rules.
• Distribution or "AI music" partners offering a share of royalties from catalogs you didn't create.
• Sudden spikes in plays from a handful of locations or accounts.

For listeners:

• Recommended "artists" with huge play counts but no tour dates, interviews or social presence.
• Accounts on your family plan you don't recognize, which can indicate a hijacked or resold account.
• Unknown subscriptions on your card. Fraudsters use stolen or fraudulently obtained payment cards to open accounts.

What to do

1. Check your card statements for streaming subscriptions you didn't open, and report them to your bank.
2. Secure your streaming accounts with strong, unique passwords and remove unknown family-plan members.
3. Artists: report suspected artificial streaming to your distributor and the platform, and avoid any service selling plays.
4. Report fraud to the FBI at ic3.gov. The FBI investigated this case [1].

Case status (as of Oct. 7, 2026)

Defendant	Court	Status as of Oct. 7, 2026	Source
Michael Smith, 54, Cornelius, NC	Federal, S.D.N.Y.	Pleaded guilty March 19, 2026, to conspiracy to commit wire fraud; sentenced Oct. 6, 2026, to 18 months in prison, 2 years supervised release, $8,091,843.64 forfeiture	[1], [2]

Statuses can change, including through appeal.

Sources

1. U.S. Attorney's Office, Southern District of New York, "North Carolina Man Sentenced To 18 Months In Prison For Super Intelligence-Assisted Music Streaming Fraud," press release, Oct. 6, 2026 (as distributed by Public). https://www.pubt.io/view/8FA0BD19ECCA17DAEE11F39B686424E95FB5C755
2. Sergiu Gatlan, "Musician sent to prison for $10 million streaming fraud using AI bots," BleepingComputer, Oct. 7, 2026. https://www.bleepingcomputer.com/news/security/musician-gets-18-months-in-prison-for-10-million-streaming-fraud-using-ai-bots/

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