Man pleads guilty in first-of-its-kind AI fraud streaming case

A US man has pleaded guilty to defrauding music streaming platforms out of millions in royalties after uploading thousands of AI-generated tracks and using automated streaming bots.

The North Carolina man, Michael Smith, 52, pleaded guilty on Friday (March 20) to conspiracy to commit wire fraud as part of a deal with federal prosecutors in New York’s southern district.

The case marks one of the first successful prosecutions of AI-related fraud in the music industry.

Smith generated thousands of tracks using AI and deployed listening bots to stream them into the billions. Between 2017 and 2024, the scheme allegedly gained up to 661,000 streams per day, generating Smith more than $10 million in royalty payments.

The first criminal case of streaming fraud where a North Carolina musician who used AI to make songs, then streamed them billions of times himself making $8 million pic.twitter.com/1ZhoZPDrkW

— FearBuck (@FearedBuck) March 20, 2026

U.S. attorney Damian Williams said Smith stole “millions in royalties that should have been paid to musicians, songwriters, and other rights holders whose songs were legitimately streamed.”

Under the terms of his plea agreement, Smith now faces up to five years in prison and will forfeit over $8 million.

The news comes as tensions over AI in music remain high. It follows Xania Monet becoming the first AI-created artist to chart on the US Billboard rankings.

Metal band Counterparts also called out an AI-generated project that allegedly stole elements from other bands’ artwork. 

R&B giant SZA recently hit out against AI in music, saying she “feels like she’s at war” because of the technology, also highlighting its environmental racism. 

Meanwhile, online music distribution platform Bandcamp has banned AI entirely, pledging to “keep Bandcamp human.”

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