A Cornelius man has admitted to running a massive music streaming fraud scheme that used artificial intelligence and automated bots to steal more than $8 million in royalties, federal prosecutors said. Michael Smith, 54, pleaded guilty to conspiracy to commit wire fraud in federal court in New York.
Prosecutors said Smith created hundreds of thousands of AI-generated songs and then used automated programs to stream them billions of times on platforms including Amazon Music, Apple Music, Spotify, and YouTube Music. Instead of driving traffic to a few tracks, officials said he spread the fake plays across a huge catalog to avoid fraud detection systems.
Federal officials said the scheme drained money from the shared royalty pool while legitimate artists competed for small payouts. Investigators said the operation averaged roughly 660,000 fake streams per day and generated about $1.2 million a year.
Authorities said Smith used thousands of bot accounts and fake email accounts to keep the streams running around the clock. Prosecutors also said he attached fake artist names and song titles to make the tracks appear legitimate.
As part of his guilty plea, Smith agreed to forfeit $8,091,843.64. He faces a maximum sentence of five years in prison and is scheduled to be sentenced on July 29, 2026.
The FBI investigated the case, which is being handled by the Southern District of New York’s Complex Frauds and Cybercrime Unit. Federal officials say it is one of the first major criminal cases involving large-scale AI-driven music streaming fraud.
