How did one man siphon $8 million out of streaming?
Michael Smith, from North Carolina, spent seven years running what prosecutors call a straightforward theft dressed up as a catalog. Starting in 2017, he uploaded thousands of AI-generated tracks to streaming services, then used up to 10,000 bot accounts at once to stream them around the clock. By the time the scheme collapsed in 2024, he'd pulled $8,091,843.64 in royalties, according to the prosecution's sentencing filing reported by Music Business Worldwide. He pleaded guilty in March 2026 to conspiracy to commit wire fraud, and his sentencing hearing in front of Judge John G. Koeltl in the Southern District of New York is set for October 6, 2026.
The number that makes the case: in April 2023, Smith's catalog drew 80.9 million family-plan streams on YouTube Music. Taylor Swift's entire catalog, across every song she has ever released, pulled 9.3 million that same month. One man with a bot farm out-streamed one of the biggest pop stars alive by close to nine times, using music nobody actually made.
Why should a house producer in Berlin or Johannesburg care?
Because the money didn't come from nowhere. Spotify, YouTube Music and Apple Music don't pay a fixed rate per stream: they pool subscriber revenue each month and divide it pro-rata, by each artist's share of total plays on the platform. Every fake stream Smith generated added weight to the denominator and shrank the slice left for everyone streaming honestly that month, majors and unsigned bedroom producers alike. Prosecutors made exactly this point in their filing, noting that unlike securities fraud, where losses spread thin across a market, every penny Smith stole came directly out of a pool other artists were drawing from.
For a touring deep house DJ or an unsigned afro house producer, a stream payout is already a fraction of a cent. A scheme the size of Smith's, roughly $2 million pulled per year on average over seven years, doesn't just steal from Taylor Swift's accountants. It quietly taxes every small discography competing for the same royalty pot.
"Every penny of loss was diverted to the defendant," prosecutors wrote, distinguishing the case from fraud where losses disperse across many victims.
What happens on October 6?
The three parties in the case can't agree on what Smith's theft is worth. Prosecutors want at least 46 months, inside a sentencing guideline range of 46 to 57 months, and have leaned on the scale of the fraud and the need to deter copycats. The federal probation office recommends just 24 months. Smith's own defense is asking Judge Koeltl for probation and no prison time at all. The Music Fights Fraud Alliance, an industry anti-fraud coalition, submitted a letter ahead of the hearing pushing for a sentence that actually deters the next person tempted to build a bot farm instead of an audience.
This is reported as the first criminal prosecution of streaming fraud in the United States. Whatever Koeltl decides on October 6 will be the first real signal of how seriously US courts treat stealing from a royalty pool that every working artist, famous or not, depends on.
