He pockets 8 million with fake AI-generated songs: the scam that's shaking the music industry

Michael Smith, 52, is from North Carolina and you probably don't know him. Yet, he pleaded guilty on March 20, 2026, in a federal court in New York. The charge was conspiracy to commit wire fraud. This is one of the first convictions for AI-related fraud in the music industry.

An industrial system built over 7 years

Between 2017 and 2024, Michael Smith created hundreds of thousands of songs using generative AI systems, then deployed them on Amazon Music, Apple Music, Spotify and YouTube Music. In order to artificially inflate streams, he used thousands of bots spread across 1,040 accounts according to a Rolling Stone investigation. This allowed him to simulate the behavior of real listeners and evade the platforms' detection systems.

Using this methodology, approximately 661,440 streams were generated per day. This represents more than $1.2 million in annual royalties. The figures are staggering, as more than $8 million was diverted from the artists whose tracks were legitimately streamed.

Prosecutor Jay Clayton was direct in his statement, explaining that "the songs and the listeners were fictitious." The millions of dollars stolen, however, were very real.

A sentence is expected in July 2026

As part of his agreement with federal prosecutors, Michael Smith agreed to return $8,091,843.64. His sentence will be handed down on July 29. He still faces up to 5 years in prison, 3 years of supervised release, and a $250,000 fine. Beyond the personal case, this affair illustrates a threat that should not be ignored for the music industry. Deezer recently estimated that 70% of AI-generated music streams on its platform were fraudulent. Spotify removed 75 million spam tracks in the past year alone. Apple Music also wanted to flag all AI-generated music. Platforms like Suno and Udio allow for large-scale AI music production. They are facing legal action in the United States. Michael Smith's scheme was exposed on X by an internet user named Tuki. He believes it's "music that no one has ever really listened to, generated by AI, listened to by robots." The music industry, which thought it had overcome the Napster era, finds itself facing a challenge it absolutely cannot ignore.