Prosecutors Allege $10M Royalty Scam Using AI-Generated Songs
The N.Y. Times (Maia Coleman) reports:
A North Carolina man used artificial intelligence to create hundreds of thousands of fake songs by fake bands, then put them on streaming services where they were enjoyed by an audience of fake listeners, prosecutors said.
From the Indictment:
From approximately 2017, up to and including 2024, MICHAEL SMITH, the defendant, orchestrated a scheme to steal millions of dollars of musical royalties by fraudulently inflating music streams on digital streaming platforms (the “Streaming Platforms”), such as Amazon Music, Apple Music, Spotify, and YouTube Music. SMITH purchased from a coconspirator hundreds of thousands of songs that were created through artificial intelligence (“AI”) and then uploaded to the Streaming Platforms.
SMITH then used “bots”—automated programs—to stream the AI-generated songs billions of times. At the height of his fraudulent scheme. SMITH used over a thousand bot accounts simultaneously to artificially boost streams of his music across the Streaming Platforms. By manipulating the streaming data in this manner, SMITH fraudulently obtained more than $10 million in royalty payments to which he was not entitled….
As alleged herein, MICHAEL SMITH, the defendant, made false and misleading statements to the Streaming Platforms, Rights Organizations, and certain companies that facilitate the distribution of artists’ music to the Streaming Platforms. As described below, those lies were repeated and varying but all were intended to promote and conceal his massive streaming manipulation fraud. As a result of his false and misleading statements, SMITH fraudulently obtained millions of dolla
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