AI Streaming Fraud Guilty Plea: How One Man Used Boomy to Generate 661,000 Fake Streams Per Day and Stole $10 Million

For seven years, Michael Smith ran one of the most audacious fraud schemes the music industry has ever seen. Using AI-generated songs and an army of bot accounts, the 54-year-old North Carolina musician racked up 661,000 fake streams per day across Spotify, Apple Music, Amazon Music, and YouTube Music — siphoning more than $10 million in royalties that should have gone to real artists. On March 19, 2026, it all came crashing down when Smith pleaded guilty in a New York federal court, marking the first-ever U.S. criminal prosecution for AI streaming fraud.

The $10 Million AI Streaming Fraud Scheme, Explained

The scheme was breathtaking in its scale and simplicity. Between 2017 and 2024, Smith partnered with the CEO of AI music platform Boomy — later identified as Alex Mitchell — to generate hundreds of thousands of AI-created tracks. According to court documents, Mitchell provided Smith with songs in exchange for either $2,000 per month or 15% of Smith’s streaming revenue, whichever was higher. Mitchell has not been charged with any crime.

Smith then uploaded these AI-generated tracks to major streaming platforms under various artist names. But creating the music was only half the operation. The real machinery behind the fraud was an elaborate bot network.

How 1,040 Bot Accounts Generated 661,000 Daily Fake Streams

As Rolling Stone reported, Smith operated approximately 1,040 bot accounts, each programmed to stream around 636 of his AI-generated songs every day. The math is staggering: 1,040 accounts multiplied by 636 streams equals roughly 661,440 fake streams daily. That translated to approximately $3,307 per day, $99,216 per month, and more than $1.2 million annually in fraudulent royalty payments.

The genius — if you can call it that — was in the distribution. By spreading automated plays across thousands of different tracks, Smith avoided the kind of suspicious single-track spikes that streaming platforms typically flag. The bot accounts used bulk email registrations and ran on cloud infrastructure, creating the appearance of legitimate listening activity from diverse users.

The Boomy Connection: AI Music at Industrial Scale

Boomy is an AI music generation platform that allows users to create songs in seconds using machine learning models. While the platform itself is a legitimate service used by millions, Smith exploited it to produce music at a scale no human could match. Hundreds of thousands of tracks were generated — each one just different enough to appear as a unique song from a unique artist.

According to Billboard’s investigation, hundreds of the songs registered to Smith listed Boomy CEO Alex Mitchell as a co-writer. When the Mechanical Licensing Collective (MLC) confronted Smith’s representatives about the AI-generated nature of the music in 2023, they initially denied it — a lie that would eventually contribute to the criminal case against him.

How the Scheme Unraveled: The MLC’s Role

The Mechanical Licensing Collective, established under the Music Modernization Act to administer blanket mechanical licenses for streaming services, played a pivotal role in uncovering the fraud. In 2023, the MLC’s anti-fraud systems detected anomalous streaming patterns associated with Smith’s catalog and flagged them for investigation.

“Today’s news highlights the serious threat that streaming fraud poses to the music industry and the important role The MLC plays in confronting it,” the organization said in a statement following Smith’s guilty plea.

The investigation eventually led to Smith’s arrest in September 2024 and the filing of federal charges. After more than a year of legal proceedings, Smith pleaded guilty on March 19, 2026, to one count of conspiracy to commit wire fraud.

The Verdict and What Comes Next

U.S. Attorney Jay Clayton did not mince words: “Michael Smith generated thousands of fake songs using artificial intelligence and then streamed those fake songs billions of times. Although the songs and listeners were fake, the millions of dollars Smith stole was real.”

Smith has agreed to forfeit $8,091,843.64 in proceeds from the scheme. He faces a maximum sentence of five years in federal prison, with sentencing scheduled for July 29, 2026. The charge of conspiracy to commit wire fraud carries significant weight, and legal experts suggest Smith could receive a substantial prison term given the scale and duration of the fraud.

For the music industry, this case represents a watershed moment. As Music Business Worldwide noted, it is the most substantial streaming fraud prosecution to date in terms of alleged monetary gain and sets a critical legal precedent for how AI-generated content fraud will be prosecuted going forward.

Why This Case Matters for Every Artist and Producer

The implications of the Michael Smith case extend far beyond one man’s criminal scheme. Every fake stream generated by Smith’s bots diverted royalty payments away from legitimate artists, songwriters, and producers. The streaming economy operates on a pro-rata model, meaning total royalty pools are divided based on share of total streams. When fraudulent streams inflate the denominator, everyone else’s per-stream payout shrinks.

Industry estimates suggest streaming fraud costs legitimate rights holders hundreds of millions of dollars annually. Smith’s $10 million haul, while significant, likely represents just the tip of the iceberg. Platforms like Spotify have invested heavily in fraud detection — the company confirmed its losses from Smith’s scheme were approximately $60,000, suggesting their systems caught much of the fraudulent activity. But smaller distributors and platforms with less sophisticated detection may be far more vulnerable.

This guilty plea sends a clear message: AI streaming fraud is not a gray area or a clever loophole. It is wire fraud, and the U.S. Department of Justice is prepared to prosecute it as such. For producers, artists, and anyone in the music ecosystem, the case underscores the importance of supporting anti-fraud measures and advocating for transparent streaming metrics.

As AI music generation tools become increasingly accessible, the industry must balance innovation with accountability. The technology itself is not the villain — Boomy and similar platforms have legitimate creative applications. But when that technology is weaponized to steal from real artists at industrial scale, the consequences, as Michael Smith is learning, are very real.