According to court documents unsealed in the Southern District of New York, Smith worked with the CEO of an AI music company and an unnamed music promoter to upload hundreds of thousands of AI-generated tracks to streaming services. He then used more than 1,000 bot accounts to stream the songs, rotating them through virtual private networks to evade anti-fraud detection.
At the scheme's peak, Smith operated 52 cloud service accounts, each with about 20 bot accounts. Each bot could stream roughly 636 songs per day, generating an estimated 661,440 streams daily. At an average royalty rate of half a cent per stream, the daily take reached $3,307.20, with annual earnings exceeding $1.2 million.
In an October 2018 email to accomplices, Smith wrote that they needed "a TON of songs fast" to work around updated anti-fraud policies, adding they needed "a TON of content with small amounts of Streams" to avoid raising flags.
The Department of Justice highlighted the scale of the fraud by comparing Smith's activities to legitimate artist streams. In April 2023, Taylor Swift's entire catalog received 9.3 million streams from family plans on YouTube Music, while Smith's bot accounts streamed his AI-generated music 80.9 million times using family plans during the same month. In a February 2024 email, Smith boasted that his songs had generated "over 4 billion streams and $12 million in royalties since 2019."
U.S. Attorney Jamie McDonald said in a statement: "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."
In addition to the prison term, Smith was ordered to pay $8,091,843.64 in forfeiture and will serve two years of supervised release after his incarceration.