Everyone in the music streaming world has been aware of fake streams stealing money from artists, but nobody did much about it. Criminal charges rarely happened. That all shifted on March 19, inside a New York federal courtroom. Michael Smith, a 54-year-old musician from Cornelius, North Carolina, became the first person in the U.S. convicted for using AI to commit streaming fraud. The scale of his scheme over seven years blew the industry away.
Smith, 54, pleaded guilty on March 19 to conspiracy to commit wire fraud, standing before U.S. District Judge John G. Koeltl in New York. Prosecutors are calling this the first criminal streaming fraud case in the country.
The U.S. Attorney’s Office says Smith agreed to give up over $8 million in fraudulent royalties. He could spend up to five years in prison, and he will be sentenced on July 29. The scheme was shockingly simple but massive, and almost no one noticed it for seven years.
The North Carolina resident cranked out hundreds of thousands of cheap songs with AI tools, then set up more than 1,000 bot accounts on platforms like Spotify, Apple Music, Amazon Music, and YouTube Music. These bots just kept playing the songs nonstop, logging streams day and night and racking up royalty payments.
Smith didn’t dump billions of streams on a single track. That would have set off instant alarms. Instead, he spread everything out, using thousands of songs with oddball titles like “Zyzomys” and “Zyme Bedewing,” under artist names such as “Calvinistic Dust” and “Camel Edible.”
This setup pulled in about 661,000 streams every day. With royalties averaging half a cent per stream, that’s around $3,300 a day, and just over $1.2 million each year. Smith kept the operation running from 2017 until 2023, when the platforms and the Mechanical Licensing Collective finally spotted his artificial streaming network.
Investigators also found out that Smith teamed up with the CEO of an AI music company, later identified as Boomy, who provided him with songs. In return, the CEO received either $2,000 per month or 15% of Smith’s revenue, whichever was more. So far, the CEO hasn’t faced any charges.
Internet Reacts to North Carolina Resident Becoming America’s First AI Streaming Fraud Conviction
The story quickly sparked a wave of reactions online, with many users stunned by the scale of what had happened. “This is insane, man! I still think he should keep part of the money,” one person wrote.
Others focused on the effort behind the scheme, arguing it wasn’t as simple as it looked. “Can’t imagine the cost to run this level of illegal hack,” a user commented. Another added, “He didn’t steal from artists. He stole from Spotify’s broken royalty system. Legend behavior tbh.”
Some commenters framed it as exposing a larger flaw in the system. “He should be allowed to keep what he got for finding and exposing the exploitable nature of the system,” one person wrote, while another joked, “I spent three hours today choosing a font while this guy built a fake music empire and retired.”
Others zoomed out to the bigger implications, questioning how widespread the issue might be. “One person finding the loophole is the canary. The real question: how many others already figured this out and just didn’t get caught?” a comment read. Another concluded, “This isn’t just fraud, it’s a preview of the chaos AI can create in digital industries. Fake content, fake engagement, real money—how do you regulate that?”
Streaming platforms only have so much money to hand out. So when someone fakes a stream, they are literally taking a dollar from a real artist’s pocket. Michael Smith saw this back in 2017 and took full advantage, racking up seven years of AI-fueled fraud. Now, North Carolina has handed down the music industry’s first criminal conviction for this kind of scam.
