Michael Smith, a 54-year-old musician from Cornelius, North Carolina, was sentenced on October 6, 2026 to 18 months in federal prison and ordered to forfeit $8,091,843.64 for using bot accounts to stream AI-generated songs. The next day the U.S. Copyright Office opened a public inquiry into music streaming fraud. Comments are due November 23.
Judge John G. Koeltl set the forfeiture at the loss amount both sides agreed on, Music Business Worldwide reported.
What did Michael Smith actually do?
Between 2017 and 2024, prosecutors say, Smith ran thousands of fake accounts on Spotify, Apple Music, Amazon Music and YouTube Music that streamed hundreds of thousands of AI-generated songs billions of times. At some points as many as 10,000 bot accounts were active. In April 2023, according to the government's figures as reported by MBW, his bots played his AI catalog 80.9 million times on YouTube Music family plans, against 9.3 million plays for Taylor Swift's entire catalog.
The trick was spreading plays thin. In an October 2018 email, Smith described the plan as “a TON of content with small amounts of Streams.” He pleaded guilty in March to one count of conspiracy to commit wire fraud. Prosecutors had asked for at least 46 months.
Michael Smith exploited super intelligence technology to generate a fraud.Jamie McDonald, U.S. Attorney, statement reported by WUNC
Why does a fake stream cost a real artist money?
Because streaming pays out of a pot, not a meter. The Copyright Office's own notice explains that services set aside a share of revenue as royalty pools, and under this “pro-rata” system the more a song is played, the more its rightsholders receive. A bot pressing play adds nothing to the pot. It only adds a slice, which makes every honest slice smaller. The notice names “the dilution of the royalty revenue pool” as the primary harm.
A fake stream never adds a cent to the pot. It just cuts the pie into more slices.
For a major, dilution vanishes across a giant catalog. For an independent on modest play counts it is real money, and the notice lists harms that land hardest on the small: distorted data that artists and venues use to decide where to tour, and fewer fans discovering lesser-known acts. As our look at what Spotify counts really say found, a play is only worth what the pool says it is.
The cure can sting innocent artists too. The notice cites Apple Music fines of 10% to 50% and a reported Spotify charge of $10 per track with detected fraud. Those land on the uploader, even one who never bought a stream.
What is the Copyright Office asking?
The inquiry (Docket No. 2026-6) answers a May 21 letter from Rep. Scott Fitzgerald of Wisconsin, who wrote that fraudsters “divert money from a finite royalty pool that would otherwise be distributed to actual rights holders.” It poses ten subjects, including:
- How fraud is executed, from bot farms to playlist manipulation
- Which industry policies may be inadvertently feeding it
- Its link to AI-generated music and to licensing and royalties
- Its effect on live music: venue selection, ticket sales and merch
- Whether trusted distributors, verification, clawbacks, fines and takedowns work
- A shared fraud database, suspicious-activity sharing, and new laws such as no-fault injunctive relief
| Date | What happened |
|---|---|
| May 21 | Rep. Fitzgerald asks the Office to study streaming fraud |
| Sep 15 | UMG sues DistroKid, a case the notice cites |
| Oct 6 | Smith sentenced to 18 months |
| Oct 7 | Notice of inquiry published |
| Nov 23 | Initial comments due, 11:59 p.m. Eastern |
| Dec 21 | Reply comments due |
How can an independent artist weigh in by November 23?
Comments go through regulations.gov, with instructions on the Office's music streaming fraud policy page. A short comment can be typed into a 5,000-character box; a longer one goes up as a single file of 6 MB or less (searchable PDF, Word, RTF or plain text). Individuals enter their own first and last name, and everything submitted is public.
The questions keep asking “what data is available,” so specifics beat opinions. A bot spike you never paid for, a fine or takedown from your distributor, a song copied and reuploaded under another name, royalties withheld under a minimum-play rule: that is evidence Congress does not have. Majors and big distributors will file. This summer's AI music fights showed how the rules get written when only one side shows up, and with streaming growth slowing, every honest slice of the pool is about to matter more.