A North Carolina musician, Michael Smith (52), has pleaded not guilty to charges related to an alleged $10 million streaming fraud scheme. The case, which began in Manhattan with bail set at $500,000 by US District Judge John Koeltl, involves three felony counts.

The US government's indictment alleges Smith created hundreds of thousands of AI-generated songs and used bots to stream them billions of times. The scheme reportedly involved:

• Creating fake email and cloud service accounts
• Purchasing streaming platform family plans
• Using bots to generate 661,440 streams daily
• Generating approximately $1.2 million in annual royalties

Spotify has confirmed that their platform accounted for less than 1% ($60,000) of the total fraudulent earnings, crediting their robust fraud detection systems. An unnamed streaming service (identified by news outlets as Spotify) detected and stopped royalty payments to Smith as early as 2019.

The Mechanical Licensing Collective also identified irregularities in Smith's streaming data and suspended related royalty payments. This coincided with their partnership with Beatdapp, a fraud detection platform that estimates streaming fraud costs artists approximately $2 billion in lost royalties annually.

Related Articles

Previous Articles