Authorities in North Carolina have arrested Michael Smith for allegedly using Artificial Intelligence to create fake music bands and orchestrating a streaming scam that resulted in earnings of over $10 million.
Smith’s elaborate scheme involved manipulating the AI to generate tracks and albums for non-existent artists, which were then streamed on various platforms to fraudulently boost his profits.
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The DOJ’s press release explains that Smith worked with two unnamed accomplices, including a music promoter and the CEO of an AI music firm, to create and upload AI-generated music on platforms like Spotify, Apple Music, Amazon Music, and YouTube Music. Smith allegedly employed bots to stream these fake songs billions of times, inflating the number of plays and converting them into royalty payments. His manipulation of streaming platforms allowed him to exploit their anti-fraud systems and bypass detection for years.
Emails uncovered by investigators revealed the inner workings of the scheme. In one 2018 email, Smith urged his co-conspirators to quickly produce a vast number of songs to evade anti-fraud policies that platforms were enforcing. The CEO of the AI music company responded by regularly providing “thousands of songs” with randomized file names, like “n_7a2b2d74-1621-4385-895d-b1e4af78d860.mp3.” Smith would then rename these files with more human-sounding song titles like “Zygotes” and “Zyme Bedewing.” The fake artists associated with these tracks had equally peculiar names, such as “Calvin Mann,” “Calorie Event,” and “Calypso Xored.”
The scheme revolved around generating massive amounts of low-quality, AI-generated “instant music” designed solely to exploit the streaming platforms’ royalty systems. Bots were deployed to stream the songs billions of times without any real human listeners, which led to substantial payouts for Smith and his accomplices.
Despite the overwhelming evidence presented by the DOJ, including the emails and manipulation of streaming data, Smith has denied all allegations. In a statement to the New York Times, he expressed disbelief and indignation, claiming that there was “no fraud” involved and questioning how he could appeal the charges.
This arrest serves as a reminder of the potential risks and consequences of exploiting technology for illegal activities. Smith is now facing charges related to fraud and intellectual property theft, and the investigation into his operation is still ongoing.
