An American man has pleaded guilty to defrauding musicians and global music streaming platforms out of millions of dollars via the AI creation of hundreds of thousands of songs which were streamed billions of times by automated 'bots' he set up.
Michael Smith, 54, of Cornelius, North Carolina, admitted one count of conspiracy to commit wire fraud, which carries a maximum sentence of five years in prison. He will learn his sentence in July. Smith also agreed to pay back royalties of $8,091,843.64 obtained fraudulently.
Smith set up thousands of accounts on streaming platforms and created software to continuously stream hundreds of thousands of fake songs that he generated via AI.
Explaining the exact nature of Smith's offence and how it was perpetrated, a statement on the Department of Justice website reads: "Music can be streamed through music streaming platforms such as Amazon Music, Apple Music, Spotify, and YouTube Music (the 'Streaming Platforms'). Each time a song is streamed through one of the Streaming Platforms, the songwriter who composed the song, the musician who performed it, and in certain cases other rights holders, are entitled to small royalty payments.
"Royalty payments are made proportionately to musicians and songwriters from a pool of funds. As a result, streaming fraud diverts funds from musicians and songwriters whose songs were legitimately streamed by real consumers to those who use automation to falsely create the appearance of legitimate streaming."
