Man Charged in AI-Generated Music Fraud on Spotify and Apple Music
In a first criminal case involving AI-generated music, a man residing in North Carolina was charged with stealing royalties by using AI to generate fake songs and fake listeners on streaming platforms.
In a September 4 filing, US Attorney Damian Williams charged Michael Smith, 52, for creating a scheme that allowed him to fraudulently obtain $10m in royalty payments from music streaming platforms.
Smith is accused of producing hundreds of thousands of songs with AI, which he published on several streaming platforms and fraudulently streamed using automated accounts commonly known as bots. The targeted platforms included Amazon Music, Apple Music, Spotify, and YouTube Music.
Network of Bot Listener Accounts on Streaming Platforms
The US Attorney’s Office filing indicates that Smith, a musician, started the scheme in 2017 by creating thousands of accounts on music streaming platforms that were programmed to automatically and repeatedly listen to songs he owned.
According to the indictment, Smith bought thousands of email addresses that were then entrusted to individuals based partly abroad.
Their mission was to create thousands of listener accounts on various music platforms. These were then used to automatically play tracks uploaded by Smith.
Coupled with the use of virtual private networks (VPNs), which gave the impression that users were connecting from different countries, these automated accounts enabled him to generate a large number of listens on the streaming platforms.
“At a certain point in the charged time period, Smith estimated that he could use the bot accounts to generate approximately 661,440 streams per day, yielding annual royalties of $1,207,128,” said the indictment filing.
Smith spread his automated streams across thousands of songs to avoid suspicion from the platforms’ moderators.
Music Generated En Masse by AI
In order to expand the scheme and make more money, Smith realized he needed to significantly increase the number of songs he could get royalties for.
“On or about December 26, 2018, Smith emailed two co-conspirators that, ‘We need to get a TON of songs fast to make this work around the anti-fraud policies these guys are all using now,’” the US Attorney’s Office said.
To do this, Smith decided to turn to AI-generated music. He started working with the CEO of an AI music company and a music promoter to create hundreds of thousands of songs using AI technology that he could then fraudulently stream.
The criminal filing suggests that the CEO helping Smith to produce AI-generated music was aware of the end goal of the scheme.
Typically, the CEO provided Smith with thousands of AI songs each week whose file names were a randomized list of letters and numbers. Smith then created randomly generated song and artist names for audio files so that they would appear to have been created by real artists rather than artificial intelligence.
The US Attorney’s Office has observed lists of very similar names of songs and artists, each occurrence only slightly different from another.
Charged with Wire Fraud and Money Laundering
Smith was arrested on September 4 and will be presented before a US Magistrate Judge in North Carolina.
He faces charges of wire fraud conspiracy, wire fraud, and money laundering conspiracy, with each charge carrying a maximum sentence of 20 years in prison.
This case is the first-ever indictment for charges related to AI-generated music in the US.