Prosecutors Want Nearly 4 Years in Prison for Man Behind $8M AI Music Streaming Scam

Federal prosecutors are urging a Manhattan judge to sentence Michael Smith to at least 46 months in prison for a six-year AI music streaming fraud that generated more than $8 million in royalties, rejecting his request for probation ahead of his October 6 sentencing.

Smith, 54, pleaded guilty on March 16, 2026, to conspiracy to commit wire fraud after admitting that he used AI-generated music and automated accounts to generate billions of fraudulent streams. Federal sentencing guidelines call for 46 to 57 months in prison; the probation office has recommended 24 months, and Smith’s lawyers are asking U.S. District Judge John G. Koeltl to impose probation.

Prosecutors said Smith’s catalog generated 80.9 million streams from YouTube Music family-plan subscribers in April 2023, compared with 9.3 million for Taylor Swift’s entire catalog among the same subscribers that month.

Smith admitted using hundreds of thousands of AI-generated tracks and bot accounts to inflate streams across Spotify, Apple Music, Amazon Music and YouTube Music. Prosecutors say the scheme ran for more than six years and diverted more than $8 million in royalties from pools shared with legitimate artists and rights holders.

In their filing, Assistant U.S. Attorneys Nicholas Chiuchiolo and Kevin Mead argued that the length and scale of the fraud justify a prison term at the bottom of the federal guideline range. They said incarceration is necessary both to punish Smith and deter others from manipulating royalty systems for financial gain.

Smith’s attorneys, Noell P. Tin and Justine Harris, have asked for probation, arguing that he initially believed his conduct was lawful and sought advice from an experienced music lawyer. They acknowledge that he later lied to distributors and used increasingly deceptive tactics but contend that the boundaries around fraudulent streaming were less settled when the scheme began.

Prosecutors dispute that account, pointing to Smith’s statements and efforts to conceal the activity as evidence that he understood he was committing fraud.

Smith agreed to forfeit $8,091,843.64 as part of his guilty plea. Koeltl is scheduled to sentence him on October 6. The conspiracy charge carries a maximum sentence of five years in prison.