Guilty plea in AI music fraud
A U.S. defendant pled guilty after using AI‑generated tracks and streaming bots to steal roughly $10 million, uploading hundreds of thousands of fake songs that produced billions of streams. The case has prompted big labels to purge deepfake content and call for stronger AI labelling on streaming platforms. (helpnetsecurity.com)
Michael Smith, 54, of Cornelius, North Carolina, pleaded guilty on March 19, 2026 to one count of conspiracy to commit wire fraud in the Southern District of New York before U.S. District Judge John G. Koeltl. (justice.gov) Smith agreed to forfeit more than $8 million and is scheduled to be sentenced on July 29, 2026; his original September 2024 indictment carried additional counts that would have carried longer maximum penalties. (musicbusinessworldwide.com) Prosecutors and reporting indicate the operation ran about 1,040 bot accounts capable of producing approximately 661,440 automated streams per day, a peak run-rate prosecutors estimated could generate roughly $1.2 million in royalties annually. (rollingstone.com) (popsci.com) The Mechanical Licensing Collective (The MLC) flagged irregular royalty payments and halted distributions in early 2023, a disruption that helped surface the activity to investigators. (digitalmusicnews.com) The indictment alleges Smith purchased tracks from co‑conspirators and worked with an unnamed AI‑music company CEO and a music promoter beginning around 2018, according to charging documents cited by multiple outlets. (musicbusinessworldwide.com) Major streaming services have introduced technical measures and disclosure standards since 2025, with Spotify announcing DDEX‑based AI disclosures, a new spam‑filtering system, and commitments from about 15 labels and distributors to adopt AI‑labelling practices. (techcrunch.com)
