First AI Streaming Fraud Conviction: North Carolina Man Sentenced to 18 Months for $8M Royalty Theft
Michael Smith, a 54-year-old North Carolina resident, was sentenced to 18 months in federal prison for the first criminal conviction involving AI-assisted music streaming fraud. Between 2017 and 2024, Smith used thousands of bots and AI-generated songs to artificially inflate streams on platforms like Spotify and Apple Music, stealing approximately $8 million in royalties. The US Department of Justice highlighted the case as a landmark effort to deter fraud that dilutes earnings for genuine artists. While prosecutors sought a longer sentence, the judge imposed 18 months plus two years of supervised release, with Smith required to forfeit the illicit proceeds.
