• Michael Smith has been charged with wire fraud conspiracy, wire fraud and money laundering conspiracy in an elaborate scheme.
• The accused allegedly created music using AI and then used bots to listen to those songs.
• By February the accused bragged that he had made “$12 million in royalties since 2019”.

Companies creating artificial intelligence tools, especially tools that replace artists, love to opine that their tools will be used to help artists. However, these tools can also be abused to win contests for humans and as is the case in this story, commit fraud.

From 2017 until recently, one Michael Smith “orchestrated a scheme to steal millions of dollars of musical royalties by fraudulently inflating music streams on digital streaming platforms,” the US District court of the Southern District of New York wrote in a now unsealed indictment.

Smith reportedly purchased music made by AI from a co-conspirator and then used up to 10 000 bots to inflate the number of streams those songs received. By the time the law caught up to him, he’d made $10 million from the likes of Amazon Music, Apple Music, Spotify and YouTube Music through royalties.

But Smith wasn’t always using AI, the indictment’s wording suggests that he was initially inflating streams of his own music. However, the amount of content he had wasn’t enough so he eventually turned to AI. In 2018, the indictment reports, Smith began working with the chief executive officer of an AI music company as well as a music promoter to create music using AI and then use bot farms to stream that music.

From here things ramped up quickly as now that he didn’t need to rely on humans making content, he could farm royalties without delay.

The fraudster was seemingly well aware that what he was doing wasn’t exactly sanctioned. He used VPNs to hide his bot activity, he developed a methodology to evade detection of what he was doing, it was all very elaborate.

While using AI, Smith told his co-conspirators that he was making around $110 000 a week with each conspirator receiving 10 percent of that sum for their “contributions”.

But February of this year Smith was boasting that his “existing music has generated at this point over 4 billion streams and $12 million in royalties since 2019.”

The depth of Smiths alleged lies to streaming platforms, distributors and countless others runs deep and it would be impressive if it wasn’t so alarming at how easy it was for Smith to manipulate streaming services.

“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,” US attorney Damian Williams said in a statement.

Smith has been charged with wire fraud conspiracy, wire fraud and money laundering conspiracy. Each charge carries a potential 20 year prison sentence.

We doubt this will be the last time we hear about a person or company using AI to commit crimes, especially as the technology keeps attracting investment and developing at lightspeed.

[Image – 愚木混株 Cdd20 from Pixabay]