DOJ: North Carolina musician charged with music streaming fraud aided by artificial intelligence
First criminal case involving artificially inflated music streaming allegations, feds say
The U.S. Attorney’s Office for the Southern District of New York has unveiled charges against Michael Smith, a North Carolina musician, in what is being described as the first criminal case involving artificially inflated music streaming. Smith, 52, of Cornelius, NC, was arrested today on a three-count indictment alleging that he used artificial intelligence and automated programs, commonly known as “bots,” to fraudulently stream AI-generated songs billions of times, netting more than $10 million in royalty payments. Read the indictment on DocumentCloud here.
Smith is accused of creating hundreds of thousands of songs using AI technology and then employing bots to manipulate streaming platforms such as Spotify, Apple Music, and Amazon Music, generating a significant amount of illicit royalty revenue. The indictment alleges that Smith’s scheme diverted funds from legitimate artists, songwriters, and rights holders who would have otherwise received these payments.
“Face the Music”
U.S. Attorney Damian Williams emphasized the gravity of the charges, stating, “As alleged, Michael Smith fraudulently streamed songs created with artificial intelligence billions of times in order to steal royalties. 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.”
Christie M. Curtis, Acting Assistant Director in Charge of the FBI’s New York Field Office, added, “The defendant’s alleged scheme played upon the integrity of the music industry by a concerted attempt to circumvent the streaming platforms’ policies. The FBI remains dedicated to plucking out those who manipulate advanced technology to receive illicit profits and infringe on the genuine artistic talent of others.”
Details of the Scheme
The indictment alleges that Smith created thousands of bot accounts on streaming platforms, which were then used to continuously stream songs he owned. At one point, Smith estimated that these bots could generate over 660,000 streams per day, equating to more than $1.2 million in annual royalties. To avoid detection, Smith spread these streams across tens of thousands of AI-generated songs, making it harder for platforms to detect fraudulent activity.
To obtain the necessary number of songs for his scheme to succeed, Smith eventually turned to artificial intelligence. In or about 2018, he began working with the Chief Executive Officer of an AI music company (“CC-3”) and a music promoter (“CC-4”) to create hundreds of thousands of songs using artificial intelligence that SMITH could then fraudulently stream. CC-3 soon began providing SMITH with thousands of songs each week that SMITH could upload to the Streaming Platforms and manipulate the streams for. In a 2019 email to SMITH, CC-3 wrote: “Keep in mind what we’re doing musically here... this is not ‘music,’ it’s ‘instant music’ ;).”
CC-3 ultimately provided SMITH with hundreds of thousands of AI songs for which he could manipulate the streams. CC-3’s songs were typically given file names that were a randomized list of letters and numbers, such as “n_7a2b2d74-1621-4385-895d-b1e4af78d860.mp3.”
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. For example, an alphabetically consecutive selection of 25 of the names of the AI songs SMITH used is as follows: “Zygophyceae,” “Zygophyllaceae,” “Zygophyllum,” “Zygopteraceae,” “Zygopteris,” “Zygopteron,” “Zygopterous,” “Zygosporic,” “Zygotenes,” “Zygotes,” “Zygotic,” “Zygotic Lanie,” “Zygotic Washstands,” “Zyme Bedewing,” “Zymes,” “Zymite,” “Zymo Phyte,” “Zymogenes,” “Zymogenic,” “Zymologies,” “Zymoplastic,” “Zymopure,” “Zymotechnical,” “Zymotechny,” and “Zyzomys.”
Similarly, an alphabetically consecutive selection of 25 of the names of the “artists” of the AI songs he used is as follows: “Calliope Bloom,” “Calliope Erratum,” “Callous,” “Callous Humane,” “Callous Post,” “Callousness,” “Calm Baseball,” “Calm Connected,” “Calm Force,” “Calm Identity,” “Calm Innovation,” “Calm Knuckles,” “Calm Market,” “Calm The Super,” “Calm Weary,” “Calms Scorching,” “Calorie Event,” “Calorie Screams,” “Calvin Mann,” “Calvinistic Dust,” “Calypso Xored,” “Camalus Disen,” “Camaxtli Minerva,” “Cambists Cagelings,” and “Camel Edible.”
To fuel his operation, Smith allegedly collaborated with the CEO of an AI music company and a music promoter, creating and obtaining hundreds of thousands of AI-generated songs. These songs were given randomized names to appear as though they were created by real artists.
Smith faces charges of wire fraud conspiracy, wire fraud, and money laundering conspiracy, each carrying a maximum sentence of 20 years in prison. The case is being handled by the Office’s Complex Frauds and Cybercrime Unit. It is unclear why it took the DOJ over five years to bring charges against Smith. The DOJ did not provide a mugshot of the defendant.
Cops & Congress commentary: Five takeaways about this case
A New Frontier in Crime: The indictment of Michael Smith highlights a disturbing trend where criminals exploit advanced technologies, like artificial intelligence, to manipulate digital platforms for financial gain. This case underscores the need for law enforcement to adapt quickly to emerging tech-based crimes.
Impact on the Music Industry: Smith's alleged actions defrauded legitimate artists and songwriters of millions in royalties. This case should serve as a wake-up call for the music industry to implement stronger safeguards against streaming fraud, protecting the livelihoods of those who create authentic music.
AI Ethics in the Spotlight: The use of AI to generate thousands of songs as part of a fraudulent scheme raises ethical concerns. As AI continues to evolve, clear guidelines and oversight are needed to prevent its misuse, particularly in creative industries.
The Role of Big Tech: Streaming platforms like Spotify and Apple Music must be more vigilant in detecting and preventing fraud. This case demonstrates that even sophisticated systems can be exploited, calling for enhanced algorithms and monitoring tools to safeguard against such abuses.
Legal and Policy Implications: This case may set a precedent in how AI-related crimes are prosecuted and may prompt lawmakers to consider new regulations. As technology advances, so must our legal frameworks to ensure justice and fairness in a rapidly changing digital landscape.
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