Sept. 5. By Dave Yochum. A Cornelius-based music producer was arrested Wednesday and charged with multiple felonies for allegedly scamming more than $10 million in royalties using hundreds of thousands of AI-generated songs.
The FBI says Michael Smith, 52, used artificial intelligence and automated programs called “bots” to stream the AI-generated songs literally billions of times.
MICHAEL SMITH
“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,” US Attorney Damian Williams said.
Smith, who is innocent until proven guilty, was arrested at his million-dollar home on Windaliere Drive in Sterling Point.
Background
Music can be streamed through music streaming platforms such as Amazon Music, Apple Music, Spotify and YouTube Music. Each time a song is streamed, 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, so that 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.
According to the indictment, Smith created thousands of accounts to stream songs. He then used software to cause the bots to continuously stream songs that he owned.
2024 assessment of $1.3 million
‘A ton of songs’
The indictment says Smith himself said he could use bots to generate more than 600,000 streams per day, yielding annual royalties of more than $1.2 million.
“We need to get a ton of songs fast to make this work around the anti fraud policies these guys are all using now,” he wrote to two co-conspirators, according to Smith’s indictment.
The indictment says Smith 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.
ABCs
An alphabetically consecutive selection of 25 of the names of the AI songs Smith allegedly used includes: “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.”
Smith also bought vast quantities of email addresses to set up fake accounts and used a VPN service to disguise that he was controlling them all from his house, the indictment states.
Smith is charged with wire fraud conspiracy, which carries a maximum sentence of 20 years in prison; wire fraud, which carries a maximum sentence of 20 years in prison; and money laundering conspiracy, which carries a maximum sentence of 20 years in prison.
