A man has been charged in an alleged scheme to defraud music streaming platforms of over $10 million by using artificial intelligence to trick their algorithms.
The indictment alleges that Michael Smith of North Carolina, US, used bots to artificially inflate streams on platforms including Spotify, Apple Music, and YouTube, manipulating royalty payments for his AI-generated songs.
According to the indictment, Smith created thousands of fake accounts and used automated programs to continuously stream songs he owned.
Smith is also accused of creating “hundreds of thousands of songs” using AI, which he could then fraudulently stream.
An AI music company called CC-3 was allegedly involved in the scheme.
Some of the fake artist named cooked up by the defendants include ‘Calliope Bloom’, ‘Calliope Erratum’, ‘Callous’, ‘Callous Humane’, ‘Callous Post’, "Camel Edible’ and so on.
This allowed him to collect royalties that would have otherwise been paid to legitimate artists. At the height of the scheme, Smith had over 1,000 bot accounts streaming his music, according to the indictment.
The charges against Smith include conspiracy to commit wire fraud and money laundering. The U.S. Attorney’s office is also seeking forfeiture of all assets derived from the fraudulent activity.
Smith allegedly concealed his actions by using fake names and employing a large network of individuals and technology to evade detection from streaming platforms’ anti-fraud systems.