North Carolina Musician Arrested, Charged with Artificial Intelligence Fraud

NEW YORK (AP) — A North Carolina musician was arrested Wednesday and charged with using artificial intelligence to create hundreds of thousands of songs that he streamed billions of times in order to earn more than $10 million in royalties, authorities in New York said.

Michael Smith, 52, of Cornelius, North Carolina, was arrested on fraud and conspiracy charges that carry a maximum sentence of 60 years in prison.

U.S. Attorney Damian Williams said in a news release that Smith’s fraud involved defrauding musicians and songwriters between 2017 and 2019 out of the amount of royalties they could have recovered.

He said Smith, a musician with a small catalog of songs he owned, was streaming AI-created songs billions of times “to steal royalties.”

Smith’s attorney did not immediately respond to an email seeking comment.

Christie M. Curtis, head of the FBI’s New York office, said Smith “used automated features to repeatedly upload music to generate illegal royalties.”

“The FBI remains committed to pursuing those who manipulate advanced technology for illicit gain and to infringing on the authentic artistic talents of others,” she said.

The indictment in Manhattan federal court said Smith created thousands of accounts on streaming platforms so he could stream songs nonstop, generating about 661,000 streams per day. It said the avalanche of streams generated annual royalties of $1.2 million.

According to the indictment, the royalties were collected from a pool of royalties that streaming platforms are required to set aside for artists who stream sound recordings containing musical compositions.

According to the indictment, Smith used artificial intelligence to create tens of thousands of songs so that his fake streams would not notify streaming platforms or music distribution companies of the fraud.

The statement said that since 2018, Smith has been working with the CEO of an artificial intelligence music company and a music promoter to create songs.

Authorities said Smith boasted in an email last February that he had generated more than four billion streams and $12 million in royalties since 2019.

The indictment says that when the music distribution company suggested in 2018 that he might be involved in fraud, he protested, writing, “This is absolutely wrong and insane! … There is absolutely no fraud!”

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