United States federal prosecutors are asking a judge to sentence Michael Smith to at least 46 months in prison for a streaming fraud scheme that diverted more than $8 million in music royalties from artists and songwriters.
Smith, 54, pleaded guilty in March to one count of wire fraud conspiracy after admitting he used artificial intelligence to generate thousands of songs and deployed bots to stream them billions of times on platforms including Spotify and Apple Music.
Last week, his lawyers argued he should receive no prison time, saying the losses were spread so widely that “no individual artist or songwriter suffered any perceptible harm from Mr. Smith’s conduct.”
Prosecutors Reject No-Prison Argument#
In a filing submitted Tuesday, Sept. 29, federal prosecutors rejected that claim. They said Smith “labored almost daily to perpetrate massive fraud” over more than six years and directly harmed working musicians.
“Smith was the architect of, and led, a sophisticated and multi-faceted fraud scheme over the course of many years to divert musical royalties from legitimate and hard-working songwriters and other rightsholders to himself,” prosecutors wrote. “A lenient sentence will send precisely the wrong message: streaming fraud will not result in meaningful punishment.”
Prosecutors said the scheme has “all the hallmarks of the most serious white-collar crime” and that Smith “stole from hard-working (and often underpaid) songwriters, artists, and other rightsholders.”
First US Criminal Streaming Fraud Case#
The case is the first criminal enforcement action in the United States over streaming fraud, a practice worsened by artificial intelligence tools that can mass-produce fake songs and repeat plays. Royalties are paid from a finite pool, so fraudulent streams reduce payouts to real artists.
Smith was arrested in 2024 on a three-count indictment charging him with using thousands of bots to continuously stream songs on Spotify, Apple Music and other platforms beginning in 2017. In March, he pleaded guilty to a single count of wire fraud conspiracy and agreed to forfeit more than $8 million in proceeds.
Wire fraud conspiracy carries a maximum five-year prison sentence. Sentencing options in the case include:
- Maximum sentence for wire fraud conspiracy: five years
- Federal guidelines range: 46 to 57 months
- Federal probation officials’ recommendation: 24 months
Smith’s lawyers said he was “profoundly sorry” and had “accepted full responsibility” for his crimes, but argued the losses were tiny and immeasurable across millions of songwriters and artists.
Prosecutors wrote that streaming fraud redirects a portion of the existing royalty pool from every legitimate rightsholder to fraudsters. “Musical royalties that Smith fraudulently obtained came at the expense of the creators whose rightful royalties were siphoned away because every fraudulent stream perpetrated by Mr. Smith diluted the value of every legitimate stream.”
