AI Music Fraudster Wants No Prison for $8M Scam: ‘No Victim Suffered Any Real Harm’

A man who admitted to using AI music to steal millions in royalties now says he should get no prison time for the first-ever streaming fraud conviction, arguing the harm to any single artist was “insignificant” and that “big labels” were doing the same thing.

Michael Smith, 54, pled guilty in March to wire fraud conspiracy over accusations that he generated thousands of AI songs and then used bots to stream them billions of times.

It’s the first criminal case over a tricky problem that’s plagued the music industry for years.

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“The effect each individual stream of one artist’s song has on every other artist’s share of total streams is not akin to a drop in a proverbial bucket — it is a drop in an ocean,” Smith’s lawyers write in the Tuesday (Sept.

22) filing, obtained by Billboard .

“No individual artist or songwriter suffered any perceptible harm from Mr.

Smith’s conduct.” Streaming fraud is a longstanding problem for the music business, made far worse in recent years by AI that can churn out fake songs and then enable bots to play them on repeat.

By some estimates, several percentage points of all streams are inauthentic, amounting to billions of monthly plays.

Since streaming royalties are divvied up among rightsholders from a finite pie of revenue, such phony numbers siphon off money from legitimate streams of real artists.

In Tuesday’s filing, Smith’s lawyers say they’re not making excuses — that he is “profoundly sorry” and has “accepted full responsibility” for his crimes.

They acknowledge that he used “increasingly deceptive tactics” and directly lied when his conduct was eventually flagged: “He knew that he was cheating the system.” But they also argue that such shady behavior on streaming platforms is “indisputably rampant” in the music industry, “including by big labels and publishers” — and that it was not clear that what he was doing was actually illegal when he first started.

“He did not set out to commit a crime; he thought he found a way to game a corrupt system that financially incentivized and profited from artificial streaming — a system that otherwise only served corporate interests,” Smith’s lawyers write.

“Streaming fraud is … a systemic problem rooted in the structure of the digital royalty system itself,” Smith’s attorneys add.