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<\/a><\/p>\nUS District Judge John G. Koeltl handed down the sentence in Manhattan federal court on Tuesday (October 6), the US Attorney\u2019s Office for the Southern District of New York announced<\/a>.<\/p>\n Smith, 54, of Cornelius, North Carolina, pleaded guilty in March to one count of conspiracy to commit wire fraud.<\/p>\n Global recorded music trade body IFPI<\/a> said in a statement today (October 7): \u201cThis result sends a clear message that streaming fraud is a crime and has serious consequences. But enforcement is only one part of tackling streaming fraud \u2013 we also need to prevent, detect and disrupt fraudulent activity.<\/p>\n \u201cThe global music industry is collectively doing just that through the Streaming Integrity Initiative which protects artists, rightsholders and fans and strengthens trust in streaming.\u201d<\/p>\n According to prosecutors, between 2017 and 2024 Smith used thousands of fake accounts on services including Spotify<\/a>, Apple Music<\/a>, Amazon Music<\/a>, and YouTube Music<\/a> to stream hundreds of thousands of AI-generated songs billions of times.<\/p>\n In one example cited by prosecutors, Taylor Swift\u2018s entire catalog received 9.3 million family-plan streams on YouTube Music in April 2023, while Smith\u2018s bot accounts used family plans to stream his AI-generated music 80.9 million times in the same month.<\/p>\n Judge Koeltl also ordered Smith to forfeit USD $8,091,843.64, the loss figure agreed by both sides.<\/p>\n He will spend two years under court supervision after his release.<\/p>\n The 18-month term is less than half what prosecutors sought, and shorter than the US Probation Office\u2018s recommendation.<\/p>\n Prosecutors had asked for at least 46 months, the low end of the 46-to-57-month range set by federal sentencing guidelines, as MBW reported<\/a>.<\/p>\n The US Probation Office had recommended 24 months. Smith\u2018s lawyers had asked for probation<\/a>, with no prison time.<\/p>\n Prosecutors and the defense have both described the case as the first criminal prosecution of its kind in the US.<\/p>\n In a letter to the court cited by prosecutors, the Music Fights Fraud Alliance (MFFA) argued that \u201cthe sentence the Court imposes will serve as the first real signal to the public regarding the actual legal consequences of streaming fraud.\u201d<\/p>\n \u201cIf the public is watching this case, as the defendant claims, a lenient sentence will send precisely the wrong message: streaming fraud will not result in meaningful punishment,\u201d the US Attorney\u2019s Office wrote in its own sentencing letter.<\/p>\n \u201cMichael Smith exploited super intelligence technology to generate a fraud,\u201d US Attorney Jamie McDonald said on Tuesday. \u201cBy 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.<\/p>\n \u201cBy 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.\u201d<\/p>\n Jamie McDonald, US Attorney<\/p>\n \u201cThis Office is committed to ensuring the integrity of all markets, and protecting the public from those who use super intelligence for fraud.\u201d<\/p>\n When Smith pleaded guilty in March, the same office\u2019s announcement<\/a>, issued under then-US Attorney Jay Clayton, referred to \u201cartificial intelligence\u201d throughout.<\/p>\n The sentence came four days after Smith\u2018s lawyers made a last written case for probation, in a letter to Judge Koeltl dated October 2.<\/p>\n The three-page letter, signed by Justine A. Harris of Harris Trzaskoma LLP and Noell P. Tin of Tin Fulton Walker & Owen, can be read in full here<\/a>.<\/p>\n Smith has argued that a music industry lawyer he consulted told him that, at worst, his conduct would lead to civil penalties.<\/p>\n Prosecutors cast doubt on that claim, saying they believe the same lawyer emailed The Mechanical Licensing Collective (The MLC) in March 2023 insisting none of Smith\u2018s works were computer-generated.<\/p>\n Either Smith hid the facts from the lawyer, prosecutors argued, or the lawyer \u201caffirmatively lied to the MLC.\u201d<\/p>\n According to the defense letter, disclosures prosecutors made to Smith\u2018s lawyers in August 2025 show that at least one witness confirmed the lawyer \u201c100% knew that Smith was manipulating streams\u201d and even had computers in his office \u201cwith bots running.\u201d<\/p>\n The letter also argues that \u201cit is not inherently unlawful to use AI to create songs and place those songs on streaming platforms,\u201d citing a September 2025 Spotify statement that for royalty purposes \u201call music is treated equally, regardless of the tools used to make it.\u201d<\/p>\n According to the government\u2019s sentencing letter, Smith received more than USD $14 million in total from royalty-paying entities.<\/p>\n The agreed loss was calculated by deducting estimates of royalties from legitimate streams of Smith\u2018s music, and of money he paid back into royalty pools by buying the streaming accounts his bots used.<\/p>\n The US Attorney\u2019s Office had argued: \u201cEvery penny of loss was diverted to the defendant.\u201d<\/p>\n The defense letter, which does not dispute the USD $8 million-plus loss figure itself, counters that it \u201cfar exceeds any amount Mr. Smith actually \u2018pocketed.’\u201d<\/p>\n Smith\u2018s lawyers also claim the government does not dispute that \u201c(1) streaming manipulation has been, and remains, rampant across industry, (2) this is a first-of-its kind prosecution, and (3) no recording artist or songwriter suffered any appreciable loss as a result of the offense.\u201d<\/p>\n The letter also takes aim at the industry organizations, including the Nashville Songwriters Association International (NSAI), whose letters to Judge Koeltl were attached to the prosecutors\u2019 submission.<\/p>\n \u201cSentencing is not a forum for policy advocacy by trade associations,\u201d it states. \u201cThe MLC, MFFA, RIAA<\/a>, and NSAI are not victims and do not claim to be.\u201d<\/p>\n Smith\u2018s lawyers also accuse the government of failing \u201cto acknowledge the glaring unfairness of attempting to use a novel prosecution \u2013 and the liberty of an individual \u2013 as a vehicle to attempt to solve the ills of an industry.\u201d<\/p>\n The letter argues that a prison term \u201cwill only diminish Mr. Smith\u2018s ability to repay his debt to the community, including by working to pay off the massive forfeiture judgment against him.\u201d<\/p>\n According to the letter, which does not name the label, Smith has been offered \u201ca position doing audio production, mixing, mastering, and recording for a record label, at a salary of $5,000 per month.\u201d<\/p>\n