A musician indicted by the U.S. government earlier this month in connection with a $10 million streaming scam has pleaded not guilty.
According to Law360, Michael SmithThe 52-year-old North Carolina resident entered the plea in U.S. District Court Judge John Coltel “A brief trial took place” in Manhattan on Thursday.
According to court documents reviewed by MBW, Judge John Coltel issued an order on Thursday (September 18) setting Smith’s bail at $500,000.
as MBW As reported earlier this month, the U.S. government charged Smith with three felonies involving “using artificial intelligence to create hundreds of thousands of songs and using automated programs called ‘bots’ to transmit the AI-generated songs billions of times.” plan”.
Smith is accused of fraudulently generating more than US$10 million Royalties will be earned through this program between 2017 and 2024.
He faces the following charges Wire fraud, wire fraud conspiracy and money laundering conspiracyeach punishable by up to 20 years in prison.
The indictment unsealed earlier this month alleges that Smith used a variety of measures to artificially increase streaming traffic, including fake email accounts and cloud services, and paying for family plans on various streaming platforms.
According to the Justice Department announcement, Smith at one point estimated that he could use the bot to generate approx. 661,440 Daily traffic, annual royalties generated $1,207,128.
Last week, Spotify publicly stated that its platform accounted for less than 1% of US$10 million Emerging from landmark streaming fraud case.
“Spotify invests heavily in automated and manual moderation to prevent, detect and mitigate the impact of human-streamed media on our platform,” a Spotify spokesperson said. MBW in an email.
“In this case, our precautionary measures appear to be effective and limit royalties [Michael] Smith is able to generate approx. $60,000 of USD 10,000,000 stated in the indictment.
“Since Spotify usually accounts for about 50% Stream sharing, which shows how effective we are at limiting the impact of human streaming on our platform.
The indictment against Smith describes an unnamed streaming service that was able to detect Smith’s allegedly fraudulent streaming activity and cut off his payments as early as 2019.
The streaming service (referred to in the indictment as “Streaming Platform-1”) has been identified by news media as Spotify based on the wording of the terms of service cited in the indictment.
“In or about March 2019, the streaming platform – I notified a music distribution company (“Distribution Company-3″) working with Defendant Michael Smith that the streaming platform – I believed Smith had engaged in streaming fraud,” the indictment states.
“Shortly thereafter, [Smith] Communicate directly with the streaming platform-I, deny that it engages in live broadcast fraud, and require the streaming platform-I to restore its music.
“The FBI remains committed to uncovering those who use advanced technology to make illicit profits and infringe on the true artistic talent of others.”
Acting FBI Assistant Director Christie M. Curtis spoke earlier this month
Combating streaming fraud remains a key goal for the wider music industry.
In the first quarter of 2024, Spotify made a series of new changes to its royalty model, one of which was a financial penalty policy Label and dealer Each track should be “flagrant artificial streaming media” was detected in its content, the company said it would serve as “deterrence“Against artificial streaming media.
As reported earlier this month, Machinery Licensing Collective Smith’s streaming data was found to contain irregularities and related royalties were withheld. The development comes a month after MLC announced a partnership with music streaming fraud detection company beat app “Complements and enhances” MLC’s existing streaming fraud detection capabilities. (Beatdapp also formed a strategic partnership with Universal Music Group in January.)
Beatdapp said in July that streaming fraud was rampant $2 billion Annual artist royalties.
Elsewhere, last June, the French-born music streaming service Diesel has developed a strategy to address fraudulent streaming activity on its platform.
Also last June, a host of music companies, from publishers to other streaming platforms like Spotify and Amazon Music, formed what they called an “unprecedented alliance” to launch “Music Fights Fraud,” a program “aimed at eradicating Global Working Group on Streaming Media Scams”. Fraud.”
The US government’s legal action against Michael Smith is the latest high-profile streaming fraud case to make headlines around the world.
In March this year, a Danish man was sentenced to 18 months in prison for data fraud and copyright infringement. The man allegedly used bots to artificially increase the streaming numbers of 689 tracks he uploaded to the streaming platform.
Earlier this month, Acting FBI Assistant Director Christie M. Curtis said: “Michael Smith allegedly used artificial intelligence to create hundreds of thousands of songs and played them on repeat using automated features. music to earn up to $10 million in illegal royalties.
“The defendants’ alleged scheme undermined the integrity of the music industry through a concerted attempt to circumvent the policies of streaming platforms.
“The FBI remains committed to uncovering those who use advanced technology to make illicit profits and infringe on the true artistic talent of others.”global music business
