The sentencing and charges

On 6 October 2026, US District Judge John G. Koeltl sentenced 54-year-old North Carolina resident Michael Smith to 18 months in prison followed by two years of supervised release. The ruling in Manhattan federal court concludes the first federal criminal prosecution targeting artificial intelligence music streaming fraud. Prosecutors had requested a 46-month prison sentence to deter automated royalty schemes, while defense attorneys sought probation. In March 2026, Smith pleaded guilty to one count of conspiracy to commit wire fraud, a charge carrying a maximum statutory penalty of five years. The court ordered him to forfeit $8,091,843.64 in royalty payments collected across multiple digital streaming services.

Mechanics of the bot network

Smith began the operation in 2017 by artificially boosting plays of his own musical compositions before expanding to hundreds of thousands of AI-generated tracks. Working with an accomplice, he uploaded batches of computer-generated songs under randomized titles like Zymogenic and Zymes, attributing them to invented acts including Calm Identity and Calorie Event. To automate playback, Smith deployed an array that grew to more than 10,000 bots at its peak, using virtual private networks to conceal their physical locations and simulate distinct listeners. He acquired corporate credit card numbers to establish thousands of accounts across platforms including Spotify, Apple Music, Amazon Music, and YouTube Music. The bot networks streamed music through family plan subscriptions, generating royalty payouts that exceeded the monthly subscription costs.

Royalty dilution and market impact

Streaming platforms distribute royalties through shared payment pools, dividing revenue proportionately among rightsholders based on total play counts. By running continuous automated plays, Smith diverted money from legitimate artists and songwriters into his own accounts over a seven-year span. In a prominent example detailed by federal prosecutors, Smith's accounts generated 80.9 million streams on YouTube Music in April 2023 alone, surpassing Taylor Swift's 9.3 million streams in the same segment during that month. Federal officials stressed that the automated scheme stripped earnings directly from human creators.

“By flooding music streaming platforms with automated bots in the place of consumers, and fake songs in the place of creativity, Smith robbed millions in royalty payments from genuine artists and their fans.”

Michael Smith catalog80.9

Taylor Swift (same segment)9.3

Michael Smith catalog

80.9 million streams

Taylor Swift (same segment)

9.3 million streams

Data from the article text

Legal arguments and defense claims

In sentencing submissions, Assistant US Attorneys Nicholas W. Chiuchiolo and Kevin B. Mead argued that a lenient outcome would encourage others to manipulate digital streaming payouts. Defense lawyers countered that Smith did not initially set out to commit a federal crime and believed music streaming rules were unsettled when he began in 2017. They acknowledged, however, that Smith rationalized his actions and later gave false statements to music distributors questioning his traffic patterns. When addressed by Judge Koeltl during the hearing, Smith thanked the court for its consideration before sentence was imposed.

“Thank you for your consideration on everything, Your Honor.”