Fraudster charged with $12 million in stolen royalties used 1,000 bots to stream hundreds of thousands of AI tracks billions of times
They say crime doesn't pay. But North Carolina musician Michael Smith allegedly managed to con music streaming services out of $12 million by setting up a 1,000-strong army of bots to stream AI-generated tunes he'd uploaded. At least, he did until the Feds caught up with him and charged Smith with multiple crimes.
Smith along with his co-conspirators is said to have operated his dastardly scheme from 2017 until 2024. Aware that simply uploading a track or two and using bots to stream the bejesus out of them would raise red flags with streaming services, Smith hatched a plan to use hundreds of thousands of AI-generated songs.
Each track would then only be streamed a relatively small number of times and thus be less likely to attract attention. According to court documents (via Bleeping Computer), Smith laid out his plans in emails.
"In order to not raise any issues with the powers that be we need a TON of content with small amounts of Streams," Smith said, adding "we need to get a TON of songs fast to make this work around the anti-fraud policies these guys are all using now." Smith's ruse went so far as to create thousands on fake artist names and hundreds of thousands of fake track titles.
As for the "music" involved, that was sourced from a co-conspirator and CEO of an AI music company who provided Smith with hundreds of thousands of AI-generated tracks. So, that's a thousand bots listening to hundreds of thousands of AI tracks billions of times.
The streaming mechanics involved over 1,000 bots housed on 52 cloud services, all connecting via VPN services. The net result was the ability to stream over half a million tracks daily. With earnings of half a cent per stream, Smith calculated monthly earnings of roughly $100,000.
By February 2024, he was apparently boasting in emails of, "over 4 billion streams and $12 million in royalties since 2019."
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The specifics of the charges include wire fraud conspiracy, which carries a maximum sentence of 20 years in prison, wire fraud, which carries a maximum sentence of 20 years in prison, and money laundering conspiracy, which carries a maximum sentence of 20 years in prison.
The case is being prosecuted by the FBI's Complex Frauds and Cybercrime Unit. Smith was arrested earlier this week and will shortly face a hearing in front of a U.S. Magistrate Judge in North Carolina. it's not clear when any trial proceedings might begin.
Anywho, despite the millions in stolen revenues, it all seems like an awful lot of effort, what with all the bots, the cloud services, VPNs, spooling up the track and artist names and so on. Surely all that effort put into something legit would make more sense? It certainly doesn't seem like easy money, especially when it now looks like the result is going to be hard time.