In a shocking turn of events, North Carolina-based musician Michael Smith has been arrested in connection with a streaming fraud operation that allegedly earned him $10 million through the use of AI-generated songs. The 52-year-old artist was taken into custody on September 4 after an FBI raid on his home in Cornelius, NC. Smith now faces multiple charges, including money laundering, wire fraud, and conspiracy to commit wire fraud.
According to reports, Smith devised a scheme where he created thousands of bot accounts to repeatedly stream his AI-generated music on platforms like Spotify. By exploiting loopholes in the platform's anti-fraud detection systems, Smith allegedly amassed an enormous fortune from fraudulent royalties. If convicted, he could face up to 60 years in prison.
The indictment revealed that Smith collaborated with an AI music company and a promoter to flood streaming platforms with hundreds of thousands of tracks. Using a combination of VPNs and fake email accounts, he managed to hide his operations from authorities and streaming platforms alike. His representative even went as far as to tell the Mechanical Licensing Collective (MLC) that the music in question was "human-authored."
Despite his efforts to evade detection, the MLC and several streaming services had long questioned the authenticity of Smith's catalog. In 2019, he was accused of inflating his streams but vehemently denied any wrongdoing.
The controversy comes at a time when the use of AI in music is a hotly debated topic within the industry. While some artists like Grimes have welcomed AI as a tool for creativity, others—such as Nick Cave, Slash, and Ed Sheeran—have spoken out against its influence on art.
Smith’s case adds fuel to the growing conversation surrounding the ethical and legal implications of AI in the music industry, highlighting the need for more stringent regulations to protect against manipulation and fraud.
