The Pulse
Judge Sentences Michael Smith to 18 Months for AI Streaming Fraud
U.S. District Judge John G. Koeltl sentenced Michael Smith to 18 months in prison for using bot accounts to generate fraudulent music streams and collect royalties. Smith also received two years of supervised release and was ordered to forf
AI.info Team · Written with AI ·
Michael Smith’s scheme relied on AI-generated songs and automated listeners, but the crime he admitted was conspiracy to commit wire fraud. On October 6, 2026, U.S. District Judge John G. Koeltl sentenced the North Carolina man to 18 months in prison for using bot accounts to generate billions of streams and collect royalties. The Justice Department described the case as its first-ever criminally charged music-streaming fraud assisted by what its release calls “super intelligence.”
The distinction matters: Smith pleaded guilty to a fraud conspiracy, not to a separate AI offense. The sentence closes the first prosecution of this kind that the department announced, while making the mechanics of the case unusually concrete—thousands of fake accounts, hundreds of thousands of songs and, in one month, more streams for Smith’s catalog than Taylor Swift’s entire YouTube Music catalog received through family plans.
18 months in prison, plus forfeiture
Judge Koeltl imposed the prison term after Smith pleaded guilty on March 19, 2026, to one count of conspiracy to commit wire fraud. Smith, 54, of Cornelius, North Carolina, must also serve two years of supervised release and forfeit $8,091,843.64, according to the Southern District of New York’s sentencing announcement.
“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,” said U.S. Attorney Jamie McDonald.
How bots turned plays into royalties
The scheme ran from 2017 through 2024, according to prosecutors. Smith created thousands of accounts on services including Amazon Music, Apple Music, Spotify and YouTube Music, then used software to play songs he owned. He spread streams across many tracks to avoid unusual activity around any one song; DOJ says he used as many as 10,000 bot accounts at once and created accounts using fake email addresses and fraudulently obtained debit cards.
AI supplied the volume the operation needed. Smith used hundreds of thousands of AI-generated songs, which his bot accounts streamed billions of times. In April 2023, DOJ says, the accounts generated 80.9 million family-plan streams for Smith’s music on YouTube Music; Taylor Swift’s entire catalog received 9.3 million streams through family plans on the same service that month.
The comparison concerns those specific family-plan streams, not each artist’s total plays across every format or platform. Smith’s fraudulent streams brought him more than $8 million in royalties, according to the sentencing release. Streaming services distribute royalty pools in part according to listening activity, so fabricated plays can divert payments from artists and songwriters whose work drew real listeners.
The AI made scale possible; fraud was the charge
Federal prosecutors first announced the criminal case in September 2024, calling it the first criminal case involving artificially inflated music streaming. Their charging announcement described an alleged scheme involving more than $10 million in royalties and three counts. Smith later pleaded guilty to a single conspiracy count, and the government’s March 2026 plea announcement said he agreed to forfeit $8,091,843.64.
The case therefore does not establish a distinct criminal offense for generating music with AI. The conduct at issue was the use of bots and deceptive accounts to make fraudulent streams appear legitimate and obtain royalty payments. In sentencing, the court imposed prison time for the wire-fraud conspiracy; the AI-generated catalog was part of how prosecutors say Smith scaled that fraud.
A measured sentence for a high-volume scheme
The 18-month term is the concrete outcome of a case that prosecutors presented as a landmark in AI-assisted streaming fraud. The forfeiture order matches the amount Smith agreed to surrender in his plea, and the supervised-release term adds two years after prison. DOJ said the case was prosecuted by its Complex Frauds and Cybercrime Unit, with Assistant U.S. Attorneys Nicholas W. Chiuchiolo and Kevin Mead in charge.
For streaming platforms and rights holders, the case identifies a specific vulnerability: a flood of fabricated tracks paired with accounts built to imitate human listeners. For the court, the sentence addressed Smith’s admitted conspiracy to manipulate streams and collect royalties. It did not treat AI music generation itself as the crime.