A North Carolina man has pleaded guilty to defrauding music streaming platforms and cashing out over US$8 million ($13.6m) in royalties - the first criminal case of its kind in a United States court.

Michael Smith, 54, created hundreds of thousands of songs with artificial intelligence and used automated programs called “bots” to stream the music billions of times, according to the US Attorney’s Office.

Smith teamed up with the chief executive of an AI music company and a music promoter – both unnamed – and began creating songs around 2018.

This was the first criminal case involving artificially inflated music streaming, said the Attorney Office.

Attorney for the Southern District of New York Jay Clayton said “although the songs and listeners were fake, the millions of dollars Smith stole was real”.

“Millions of dollars in royalties that Smith diverted from real, deserving artists and rights holders. Smith’s brazen scheme is over, as he stands convicted of a federal crime for his AI-assisted fraud.”

Michael Smith in 2016. Photo / Bennett Raglin for Getty Images

Streaming platforms like Spotify, Apple Music, and YouTube pool a percentage of their revenue to distribute to artists, according to Spotify. The fake songs and streams drain that pool of money.

Streaming platform Deezer developed an AI-music detection tool to manage the flow of mass-produced slop.

Over 13.4m AI-tracks have been detected and tagged in 2025, said Deezer.

Smith was charged in September 2024 with making millions in royalties using AI-songs and fake streams between 2017 and 2024.

The Attorney’s Office said Smith’s bots could stream 661,440 songs a day, making $1,207,128 a year in royalties.

Smith taught the bots to mimic the streaming music like a human would, jumping around different songs to avoid detection.

Michael Smith generated thousands of songs using AI. Photo / Possessed Photography on Unsplash

Smith was aware that if “a single song was streamed one billion times, it would raise suspicions at the Streaming Platforms and the music distribution companies that those streams were the result of streaming manipulation.

“A billion fake streams spread across tens of thousands of songs, however, would be more difficult to detect, because each song would only be streamed a much smaller number of times”.

The Attorney’s Office said in 2018 Smith emailed two co-conspirators that, “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 agreed to pay $8,091,843.64 in forfeiture and pled guilty conspiracy to commit wire fraud, which carries a maximum sentence of five years in prison.

Smith is scheduled to be sentenced in full on July 29.