Fraudsters accused of stealing $12 million in royalties used 1,000 bots to stream hundreds of thousands of AI songs billions of times

They say crime doesn’t pay. But North Carolina musician Michael Smith allegedly managed to scam streaming services out of $12 million by creating an army of 1,000 bots to stream AI-generated songs he uploaded. At least that was the case until federal agents caught up with him and charged Smith with multiple felonies.

Smith and his accomplices are said to have carried out their nefarious scheme from 2017 to 2024. Aware that simply uploading one or two songs and using bots to stream them would raise suspicions from streaming services, Smith hatched a plan to use hundreds of thousands of AI-generated songs.

Each song would then be streamed a relatively small number of times and therefore less likely to attract attention. According to court documents (via Bleeping Computer), Smith outlined his plans in emails.

“In order to not cause any problems with the powers that be, we need a TON of content with a small number of streams,” Smith said, adding, “we need to get a TON of songs quickly to get around the anti-fraud policies these people are using right now.” Smith’s ruse went so far as to create thousands of fake artist names and hundreds of thousands of fake song titles.

As for the “music,” that came from a co-conspirator and the CEO of an AI music company that provided Smith with hundreds of thousands of AI-generated songs. So a thousand bots listened to hundreds of thousands of AI songs billions of times.

The streaming mechanics involved more than 1,000 bots hosted on 52 cloud services, all connecting through VPN services. The net result was the ability to stream more than half a million songs per day. At half a cent per stream, Smith calculated monthly earnings at about $100,000.

In February 2024, he boasted in emails of “over 4 billion streams and $12 million in royalties since 2019.”

Details of the charges include conspiracy to commit telecommunications fraud, punishable by up to 20 years in prison, telecommunications fraud, punishable by up to 20 years in prison, and conspiracy to commit money laundering, punishable by up to 20 years in prison.

The FBI’s Complex Frauds and Cybercrime Unit is handling the case. Smith was arrested earlier this week and will soon appear in U.S. District Court in North Carolina. It is unclear when any court proceedings will begin.

In any case, despite the millions in stolen revenue, this all seems like a huge effort, considering all the bots, cloud services, VPNs, spooling of tracks and artist names, etc. Wouldn’t all that effort put into something legal make more sense? It certainly doesn’t seem like easy money, especially now that it looks like the outcome will be difficult.