Smith is accused of creating thousands of bot accounts to stream AI-generated songs, collaborating with the CEO of an AI music company and a music promoter to produce tens of thousands of tracks to evade detection.

Despite the introduction of new penalties by streaming services to discourage fraud, Smith's methods adapted to circumvent these measures, highlighting the ongoing challenge of streaming manipulation in the industry.

This case marks a significant development as it is the first criminal prosecution by the U.S. Attorney's Office for the Southern District of New York involving the use of bots to inflate music streaming numbers.

The FBI stated that Smith's actions undermined the integrity of the music industry and violated the policies of streaming platforms, emphasizing the need for vigilance against such fraudulent activities.

Smith's fraudulent activities not only enriched him but also diverted royalties from legitimate artists, harming the music industry and depriving genuine musicians of their earnings.

North Carolina musician Michael Smith has been indicted for orchestrating a massive streaming fraud scheme that generated over $10 million in royalty payments from digital music platforms such as Spotify, Amazon Music, and Apple Music.

To fund his bot operations, Smith created a cyclical financing system, using $1.3 million in fraudulently obtained royalties to pay for streaming services.

Streaming platforms prohibit boosting play counts through bots, categorizing Smith's actions as a form of fraud that undermines the legitimacy of music consumption.

To avoid detection, Smith diversified his automated streams across tens of thousands of songs, ensuring that no single track was streamed excessively, which would raise red flags.

The Mechanical Licensing Collective halted payments to Smith over fraud concerns, reinforcing the importance of combating streaming fraud in the music industry.

Authorities believe Smith did not act alone in this scheme, suggesting a broader network may have been involved in the fraudulent activities.

The indictment highlights the increasing issue of streaming fraud in the music industry, with authorities emphasizing their commitment to addressing such illicit practices.