10,000 Bot Accounts Streamed AI Music: Michael Smith Sentenced to 18 Months in Prison in New York
Michael Smith of North Carolina was sentenced on October 6, 2026 to 18 months in prison in federal court in Manhattan for the first criminal case of AI-assisted music streaming fraud. The sentence is far below the prosecution's request of at least 46 months — and below even the Probation Office's recommendation of 24. The case reveals how a seven-year scheme with bot accounts and AI-generated songs could pull more than $8 million out of streaming's royalty system — and how difficult it is to set a sentence when the harm is diffuse.
The Sentence
Smith was sentenced by District Judge John G. Koeltl in the Southern District of New York. He had pleaded guilty on March 19, 2026 to a single count: conspiracy to commit wire fraud. In addition to 18 months in prison, he received two years of supervised release, and forfeiture of $8,091,843.64 has been ordered. This comes from the U.S. Attorney's Office for the SDNY in its press release of October 6.
According to Music Business Worldwide, the prosecution had requested at least 46 months — the low end of the guidelines range of 46 to 57 months. The U.S. Probation Office had recommended 24 months, and the defense had asked for a non-custodial sentence. The judge ended up below both.
The sentence closes the first federal criminal case tied to music streaming fraud, as Rolling Stone notes in its court report.
How the Scheme Worked
According to the SDNY press release, the fraud ran from 2017 to 2024 and followed three steps:
- Bot accounts. Smith created thousands of fake accounts on streaming services — at times up to 10,000 simultaneously. The accounts were made with fake email addresses and debit cards obtained through fraud.
- Artificial streaming. Software continuously streamed AI-generated songs owned by Smith from the bot accounts.
- Royalty extraction. The fake streams generated royalty payments that Smith withdrew — more than $8 million in total.
In an email, Smith wrote, according to the prosecution, that he needed "a TON of songs fast" in order to circumvent the platforms' anti-fraud policies. The mechanism exploited streaming services' royalty model, in which payouts are distributed pro rata according to share of total plays — every fake play thus draws value from all other rights holders in the same pool.
The Scale: Almost Nine Times Taylor Swift
The most specific figure in the case comes from April 2023. That month, Taylor Swift's entire catalog received 9.3 million plays on YouTube Music via family subscriptions. Smith's bot accounts used the same family subscriptions to stream his AI-generated music 80.9 million times — nearly nine times more than one of the world's biggest artists, in the same channel and the same month.
Why the Sentence Was Lower
The October 6 hearing exposed a fundamental point of disagreement: How large is the harm, and how should it be weighed?
Defense attorney Justine Harris argued, according to Inner City Press' court transcript, that streaming fraud was widespread and partly unregulated — she claimed, among other things, that Amazon Music, on the day the court sat, did not clearly prohibit artificial streaming. In the sentencing submission, Smith's lawyers wrote, according to Billboard, that the effect each individual play of one artist's song has on all other artists' share of total streams is "not a drop in a bucket — it's a drop in an ocean."
The prosecution turned the picture around: In their telling, the harm landed on hard-working and often underpaid songwriters, spread across millions of rights holders.
One separate point: No restitution was set, because the harm could not be calculated, Inner City Press reports. This underscores how difficult fraud of this type is to value after the fact — the value is real enough in the form of paid-out royalties, but the harm on the other side of the pool is statistically diffuse.
Judge Koeltl landed at 18 months — below the guidelines range's lower limit, below the Probation Office's recommendation, but far above the defense's wish for a non-custodial sentence.
Smith in Court
Smith himself asked the court for mercy, according to Rolling Stone, saying he had betrayed "the music community I care so much about." He admitted that he had turned his love of music into a "perverse business model."
The Reactions
U.S. Attorney Jamie McDonald said in the press release that Smith had exploited "super intelligence" technology to generate a fraud. The terminology is worth noting: The press release consistently uses "super intelligence," an expression that is otherwise not common in this context and that differs from the language in the case's other documents, which, according to coverage, referred to artificial intelligence.
The industry organizations welcomed the sentence. The Music Fights Fraud Alliance wrote in a letter to the court, quoted by MBW, that the sentence would be "the first real signal to the public regarding the actual legal consequences of streaming fraud." IFPI stated, according to MBW, that the outcome shows that streaming fraud is a criminal act with serious consequences, and the RIAA also praised the sentence.
Open Questions
Several matters remain unresolved in the public source material:
- The songs. The SDNY describes songs Smith "owned," generally AI-created. Other sources suggest that Smith also purchased and uploaded AI-generated songs. The exact split between self-made and purchased tracks has not been clarified.
- Legal assurances. Smith reportedly claimed that a music lawyer told him his conduct could at worst result in civil penalties. This is the defense's account; the prosecution disputed it, and the actual communication with the lawyer is not in the public record.
- The scale of AI streaming generally. At the hearing, an attorney relayed that the prosecution estimates that around 10 percent of streams are potentially AI-generated. This is a courtroom relay, not verified data from the Department of Justice, and should be read with that caveat.
The sentence closes the case against Smith, but at the same time it establishes only one thing for certain: that this type of fraud is criminally punishable in the United States — and that the courts are still working out how hard it should be punished.