First major AI streaming‑fraud guilty plea
Michael Smith pleaded guilty to using AI‑generated songs and bot fleets to create billions of fake streams, diverting over $8M in royalties — he’s forfeited $8.1M and faces sentencing later this spring ( ). The case is being watched as a precedent for policing AI‑generated content and fake engagement across Spotify, Apple Music, YouTube and Amazon ( ).
Smith entered his plea on March 19, 2026 in the Southern District of New York before U.S. District Judge John G. Koeltl, a submission announced by the U.S. Attorney’s Office for the SDNY. (justice.gov) Prosecutors say court filings show he used AI to generate hundreds of thousands of tracks and created thousands of automated “bot” accounts that streamed those tracks billions of times to mimic real listeners. (justice.gov) Court documents and reporting put the operation’s peak at about 661,440 fraudulent streams per day, a scale the DOJ estimated could yield roughly $1.2 million in royalties per year at peak output. (musicbusinessworldwide.com) Smith was first indicted in September 2024 on multiple counts including wire fraud and money‑laundering conspiracy — charges that together carried far higher maximum sentences — but his March 2026 plea was to a single conspiracy count that carries a maximum of five years. (musicbusinessworldwide.com) The Mechanical Licensing Collective traced anomalous patterns and halted royalty payments in early 2023, and the MLC’s intervention was a key step that led investigators to pursue the fraud. (musicbusinessworldwide.com) Reporting based on song‑credit databases shows hundreds of the disputed tracks listed Boomy CEO Alex Mitchell as a co‑writer; Mitchell has not been charged, according to Billboard and other coverage. (billboard.com)
