A North Carolina music producer has been arrested on a slew of felony charges, as he allegedly scammed over $10 million in royalties from music streaming.
According to court papers, 52-year-old music producer Michael Smith adopted AI to make hundreds of thousands of songs and automated streaming processes. The move was all to bypass fraud-detecting systems on Spotify, Amazon Music, and Apple Music.
He allegedly used that to create several thousand bot accounts streaming his songs, which the AI-generated. According to the indictment, his automated accounts also reaped up to 661,440 streams daily, making him collect significant royalties from the streaming platforms.
While Smith originally allegedly ripped off the music he owned, when the services became more sophisticated in filtering out abnormal behavior billions of streams for one song-he moved to creating hundreds of AI-generated albums.
The indictment also revealed that beginning in 2018, Smith had teamed up with an AI music company, collaborating with a music promoter to produce several thousand songs. In one of the efforts to make the whole operation appear legitimate, Smith reportedly purchased substantial amounts of email addresses and subscribed to a VPN service to conceal his home control over all the fake accounts.
It wasn't until 2023 that the MLC, the organization responsible for distributing those royalties, started questioning the validity of Smith's enormous musical productivity and started suspecting he used AI to create the music. When asked, Smith and his representatives insisted his works were "human-authored, not AI-created.".
Indictments have now been filed against Smith in the Southern District of New York on charges including money laundering, wire fraud, and conspiracy to commit wire fraud. As stated by prosecutors, his scheme started as early as 2018 and continued until his arrest.
The MLC released a statement regarding the case, emphasizing the importance of combating streaming fraud. Kris Ahrend, CEO of the MLC, said, "The indictment shines a light on the serious problem of streaming fraud for the music industry. The MLC identified and challenged the alleged misconduct, further validating the importance of our ongoing efforts to protect songwriters and combat fraud."
The case is by no means the first AI ethics have raised controversy. Recently, Elon Musk posted, on X formerly called Twitter, an AI-generated picture of Kamala Harris as a communist dictator. It lit up a firestorm about responsible digital media use. The captioned post was related to Harris's comment on Donald Trump and dictatorship, with much fuel being thrown into the already broader debate regarding the ethical bounds of AI-generated content in political discourse. Read More
Smith's case, together with the Musk-Harris incident, shows how AI-generated content is increasingly presenting a lot of problems and raising an increasing need for more stringent guidelines in its application to public platforms.