A man has been jailed for 18 months after a Spotify scam saw him generate over $8,000,000 (£6,040,000) in royalties.

In the first-of-its-kind case, Michael Smith pleaded guilty to using AI and bots to farm millions in streaming revenue from the music platform.

The 54-year-old man from North Carolina is the first person to ever be convicted of streaming fraud in a criminal case, according to Billboard.

The New York federal court ruling comes after Spotify announced it would be labelling AI-generated music following backlash from artists and listeners.

Smith uploaded the generated tracks to the platform but then used bots to stream each song billions of times, earning himself millions in royalties.

Several artists have been vocal about how little streaming pays, with the earning rate said to be around $0.003 to $0.005 (£0.002 – £0.004) per stream.

Ahead of sentencing, Smith’s lawyers had asked for no prison time after arguing that ‘no victim suffered any real harm’ and the impact on any single artist was ‘insignificant’.

His lawyers argued the impact on individual artists was a ‘drop in the ocean’.

However, the federal prosecutors argued that his behaviour had ‘exploited’ the technology to commit streaming fraud.

In a statement, prosecutor Jamie McDonald said: ‘By flooding music streaming platforms with automated bots in the place of consumers, and fake songs in the place of creativity, Smith robbed millions in royalty payments from genuine artists and their fans.’

Smith was arrested in 2024 on a three-count indictment for using bots to stream songs across Spotify, Apple Music, and other platforms.

Streaming fraud, where plays of one song get boosted through artificial methods like bots, has long been an issue for the music industry.

Now fraudsters can use AI to easily generate endless fake songs, having previously uploaded copied versions of real tracks.

Deezer revealed earlier this year that an average of 90,000 AI-generated tracks were being uploaded to its platform every day.

Last month, Sony Music Entertainment and Universal Music Group filed a federal lawsuit against AI platform Suno, alleging willful copyright infringement.

Additionally, according to the Financial Times, Sony demanded all platforms remove songs that ‘imitate our artists’ voices and likenesses without permission’.

The music group requested that 260,000 songs were removed by the end of last month, claiming the ‘deepfake’ tracks ‘harm artists and mislead fans’.

Prosecutors claimed that Smith had originally been using bots to boost his own music but then switched to mass-producing AI songs.

In the US, wire fraud conspiracy – which he pleaded guilty to one count of – carries a maximum five-year sentence.

The prosecutors asked the judge to consider at least a three-year sentence to avoid sending ‘the wrong message’ when it comes to streaming fraud.

Smith was sentenced to 18 months in prison and has agreed to forfeit the $8million he gained.

Of the conviction, the Recording Industry Association of America said: ‘Streaming fraud harms creators and deceives fans. We appreciate the Court recognising the significance of this harmful conduct and the ill-gotten gains that come from the pockets of real artists, songwriters and their label partners.’

Label executives have previously estimated that streaming fraud could be costing the industry up to $2.2billion (£1.6billion) per year.

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