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Mikhail Polyakov

Fake streams with bots and AI songs: how an $8 million scheme worked and how it ended

Level: BeginnerReading time: 9 min

Topics: AI, Security

Rows of identical smartphones on racks, each showing a sound wave icon, with glowing threads rising from them to a large coin, and a beam of light falling on the rows from the side

Short answer: on October 6, 2026, the US Attorney's Office for the Southern District of New York announced that Michael Smith of North Carolina had been sentenced to 18 months in prison and must hand over $8,091,843.64. According to prosecutors, from 2017 to 2024 he created thousands of fake accounts on streaming services, and bot programs on those accounts continuously "listened" to his tracks. There were hundreds of thousands of tracks, mostly created by AI: the fake streams were spread across many songs so that none of them would stand out. Royalties, that is, payments for streams, are paid out of a shared pool, so every fake stream reduced the payouts to real musicians. For a business, this story leads to a practical conclusion: under Spotify's rules, paid services that promise streams violate its terms and can cost you the removal of your music, and when artificial streaming is confirmed, the platform can withhold royalties and correct the counters. Below, I describe the scheme based on the prosecutors' press release, the defence's position, what Spotify does about artificial streaming, and how to check your contractor and your own statistics.

How the scheme worked

The description of the scheme below comes from the prosecutors' press release of October 6, 2026, which refers to the charging documents and materials from public court proceedings. The year charges were filed comes from Ars Technica's account. I deliberately do not retell the technical tricks.

Prosecutors describe the scheme in three steps.

  1. Fake listeners. Smith created thousands of fake accounts on streaming services. To do so, he used fake email accounts and fraudulently obtained bank cards. At times, as many as 10,000 such accounts were running at once.
  2. Bots stream his own tracks. Software made these accounts continuously play songs that Smith claimed to hold the rights to. Prosecutors write that the songs were mostly created by AI.
  3. Money for streams. Smith collected royalties for the streams he had arranged himself. In total, according to prosecutors, more than $8 million.

The scheme ran from 2017 to 2024. According to Ars Technica, Smith was charged in 2024. On March 19, 2026, he pleaded guilty to conspiracy to commit wire fraud, and on October 6 Judge John Koeltl passed sentence: 18 months in prison, two years of supervised release and forfeiture of $8,091,843.64. The US Department of Justice calls this its first criminal case of AI-assisted streaming fraud.

Why the scheme needed AI

If thousands of bots stream the same song, its counter jumps, and the platform will most likely notice the anomaly. Prosecutors state plainly that Smith spread the streams across thousands of songs so that none of them looked suspicious. In one of the emails the prosecutors quote, he explained that he needed "a TON of songs fast" to get around the platforms' "anti fraud policies", that is, their checks against fake streams and fraud.

According to prosecutors, Smith got the hundreds of thousands of songs for this with the help of AI. Prosecutors give an example: in April 2023, Taylor Swift's entire catalogue received 9.3 million streams on YouTube Music from family plans, while in the same month Smith's bots, also through family plans, streamed his tracks 80.9 million times. This is a comparison of one month on one platform and one type of subscription, not of all streams.

An important detail: as prosecutors describe it, the scheme rested on fake listeners, and AI was a way to get a large number of tracks quickly for the fake streaming.

Why fake streams take money from others

Prosecutors explain the mechanics like this. For each stream, the songwriter, the performer and in some cases other rights holders receive a small royalty. Royalties are paid out proportionately from a shared pool. So a fake stream does not create new money: it takes a share from those whose songs were streamed by real people.

To simplify with made-up numbers: a platform distributes 100 rubles per month across a million streams. If 100,000 of them are fake, the fraudster takes 10 rubles, and the other authors together receive that much less.

What the defence said

According to court filings as reported by Ars Technica, Smith's lawyers asked for probation rather than prison. They wrote that prosecutors were making an example of one man for the "ills of an industry" and that he did not actually pocket the full $8 million. They also said he had been offered a job doing audio work for a record label at $5,000 a month, and that prison would only delay repayment. The defence documents say that Smith is profoundly sorry. Prosecutors objected: in their words, Smith used increasingly deceptive tactics over time, lied to police when asked about the scheme, and a prison term was needed to deter others. The court chose a prison sentence.

What Spotify does about artificial streaming

Every platform has its own rules. Spotify describes its rules openly on a support page for artists, so I use it as an example. Spotify defines an artificial stream as any stream that does not reflect a person's genuine intent to listen, including attempts to manipulate the platform automatically, with bots or scripts.

  • Paid guaranteed streams break the rules. According to Spotify, third-party services that promise streams for money violate its terms, and using them can lead to your music being removed. The same is said about paid guaranteed placement on playlists.
  • What Spotify does when artificial streaming is confirmed. It may withhold royalties for those streams, correct public counters and charts, and, depending on the scale, remove the song from playlists. For repeated or egregious artificial streaming, it may remove the music from the platform.
  • The distributor finds out. A distributor is a company that places music on platforms on behalf of the author or rights holder. Spotify sends labels and distributors monthly reports on confirmed artificial streaming. Based on these, a distributor may issue a warning, and in flagrant or repeated cases remove the music from streaming services or block the account.
  • A charge per track. When the share of artificial streams on a track is very high, Spotify charges the label or distributor for that track.
  • Counters are cleaned daily. Spotify says it removes artificial streams from public numbers in the app every day.

How to check a promotion contractor

These are my tips for anyone who pays to promote music, videos or a company page. This is not a legal assessment, but a way to avoid paying for artificially inflated streams, views or followers disguised as promotion.

  1. Treat a promise of an exact number of streams, views or followers for money as a reason to stop. For streams on Spotify, the rules say directly that such paid services violate its terms. For other platforms, this is my own conclusion: advertising can be bought as impressions, but I do not know an honest way to guarantee that real people will press "play" a set number of times. So I treat such a promise as a reason to stop and look into it.
    • Who does it: whoever signs the contract with the contractor.
    • How to check: the contract and the contractor's offer contain no promise of a set number of streams or a playlist placement for payment.
  2. Ask where the listeners will come from. Ask the contractor to name the channels: advertising on the platform, paid posts by specific bloggers and authors, a mailing to their own list.
    • Who does it: the owner or the marketer.
    • How to check: each channel has a name and a report from the source, not just a final number from the contractor.
  3. Read your platform's rules on fake streams before ordering. For Spotify, this is a separate support page for artists. On another platform, look for the section on artificial streams or views in the terms of use.
    • Who does it: whoever publishes the content.
    • How to check: you can name what the platform does about fake streams: withholds money, takes content down or blocks the account.

How to spot fake streams in your own statistics

Even if you did not inflate anything yourself, a suspicious playlist or "promotion" without your knowledge can spoil your statistics.

  1. Watch for sharp spikes. Streams grew several times over in a day without advertising, a post or a mention by someone well known.
    • Who does it: the page owner or whoever keeps the statistics.
    • How to check: each spike has an explainable cause, written down next to the date.
  2. Look at where listeners came from. A large share of streams from one unfamiliar playlist, or from a country where you did not promote, is a reason to look into it.
    • Who does it: the same person.
    • How to check: you know who runs the playlists that bring you the most streams.
  3. Report it to the platform. Spotify for Artists has a form for reporting a suspicious playlist your music was added to. If the platform has already withheld royalties and you are sure the streams were genuine, Spotify advises giving your distributor or label a description of how you promoted the music.
    • Who does it: the artist or their distributor.
    • How to check: the report has been sent and the platform's reply is saved.

If you release music or videos made with AI, it matters what exactly Smith was convicted for: as prosecutors describe it, the charge concerned fake listeners, not the creation of music with AI as such. But AI on its own does not remove the risk either: if streams are faked, the Spotify measures above apply to such music too, since its page on artificial streaming makes no exception for tracks created with AI. I wrote about how to build an honest pipeline for releasing content with AI and where the checks belong in it in the article Automating content creation with AI: six steps of a pipeline and the numbers from ten articles.

When these measures are not needed

If you do not pay for promotion and do not publish content on platforms that pay for streams or views, there is nothing to check a promotion contractor against. And going through statistics day by day is, in my view, worth it when money or decisions depend on them: payouts, the advertising budget, the choice of what to release next.

Summary

According to prosecutors, from 2017 to 2024 Michael Smith collected royalties for streams generated by his own bots, and the hundreds of thousands of AI songs were needed so that the fake streams would not stand out on individual tracks. According to Ars Technica, he was charged in 2024, and in October 2026 the court gave him 18 months in prison and forfeiture of more than $8 million. Streaming money, as prosecutors explain, is divided from a shared pool, so fake streams take it from the artists whose music real people listened to. For anyone paying for promotion, the main conclusion is simple: under Spotify's rules, paid services that promise streams violate its terms, and the consequences, from the removal of music to the withholding of royalties when artificial streaming is confirmed, fall on whoever owns the music.

I work on AI agents and automation. If you would like to see my projects or discuss your own task, take a look at my portfolio.

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