Man Arrested for Creating Fake Bands With AI, Then Making $10 Million by Listening to Their Songs With Bots

Or screwed everyone over too little; if he had screwed everyone for ten billion he would be heralded as a genius.

Stealing is only wrong if you steal from rich people. It's perfectly acceptable if the victims are poor. /s

it's because his name isn't NVidia

He was arrested because he faked a ton of information related to his accounts to make it look like many people were doing it. I love that he gamed the system, but also it sounds like he totally committed financial fraud while doing so.

There are other people who have gamed the system without also committing fraud

He didn't get arrested for AI generated music. He got arrested for faking multiple accounts to upload music and using bots to generate fake listens, thus stealing millions of dollars. If he did the same thing with music he actually wrote and played, he would still be arrested.

I don't think the illegal part has anything to do with the AI

This is going to be something like fraud, larceny, etc.

No.

Music play-farming has been a thing for probably almost a decade by now.

Spotify divides the huge amount of money they get from subscribers each month, evenly among all the plays during that month.

Someone figured out ages ago, that since spotify has a free tier, that means that if you can get some tracks on spotify as an artist, you can then create an army of free-tier bot accounts and massively inflate the share of the money you get paid as an "artist".

Of course, this comes at the cost of everyone elses legit plays becoming worth less. Its an absolutely disgusting scam and Spotify has been ignoring it happening for years.

Adding AI generation into the mix is barely an innovation.

Edit: And if you're wondering how it works with services that don't have a free tier, it is done by hijacking peoples real accounts, then having them stream the relevant tracks over and over. Either by stealing entire accounts, or infecting devices that are already logged in with malware that will open the relevant app/website and play the tracks over and over.

Y'know this guy seems intelligent enough to come up with this scheme, but not intelligent enough to keep a low profile. I honestly don't understand that.

Personally, I'd do the math to pay myself a living wage with this so that my actual work salary is nothing but a cherry on top; manage it so it seems like hype is ebbing and flowing in a natural way. If you ever figure out a way to break the system like this, you should never act in a way that draws attention to yourself.

I thought the same, but it's at the cost of real artists who are struggling to survive in a harsh market, so it still hurts. Sadly, this man isn't unique. There are many Spotify listening farms listening to fake artists with AI generated songs just over 30sec which is the minimal listening requirement to get payed. And Spotify does nothing, as they get more money too.

I can appreciate a well performed scheme or crime, but only if it steals from the rich and big corps. In this case, it steals from honest artists who give us amazing music while mostly being under paid on a regular basis, with the exception here and there.

Stealing from the poor is really low. Only the biggest assholes are capable of doing that. (looks at all the billionaires)

Try to overthrow the US government? You can still be president. Break a companies arbitrary TOS? Police are at your door to take you away for a long time.

What law is being broken here?

He stepped onto the rich people's turf. We plebs are supposed to stay in our thatch huts beyond their line of sight.

Straight to jail.

It’s fraud by false representation the U.K. Fraud is basically whenever you misuse a system for undue profit. The terms are very broad. “You know it when you see it” kind of thing.

I'm not a lawyer but this sounds like a pretty textbook definition of fraudulent business practice to me.

I would assume it is Fraud

Not sure how this is a crime... breach of TOS, sure, but a crime?

What law is being broken here?

Not curious enough to actually read the article, eh?

Indicted on three counts involving money laundering and wire fraud

One may argue about money laundering but it's pretty clearly fraud.

Its theft, which is against the law to do against a company or person. Its similar to trading in empty boxes at GameStop or sending back boxes full of rocks to amazon.

Although most people seem to just pick a side based on whether they think that company should exist or not.

Gaining money from someone else by lying and/or deception. The legal term for that is fraud-- in this case, wire fraud.

What law is being broken here?

The law of "don't take money from the rich and powerful; only they take their your money".

Imagine something like a DDOS attack. But it's fans throwing AI listeners behind artists they love to boost them.

Imagine if fans shaped the music industry instead of the other way around?

America's darling Jeff Bezos exploited a flaw in his book suppliers policies to gain an unfair edge on competitors in the early days of Amazon. Best business man ever: give him the key to the city and a dick-shaped rocket ship.

He also got rich daddy and rich friend money to get money for his totally original and non-derivative idea of "selling things online". Maybe that's where this guy went wrong? No rich daddy?

What.

If he used python for creating the bots, should python creators go to jail?

Send me a link and I can get you to ~12 million and 1 listens.

I have ~12 million listens across various streaming services

The great thing about bots is that they can listen to every song on file, 24/7/365, and you can spin up as many of them as you like. 12 million is nothing.

Based on your numbers, ~260k plays per dollar. The person in the submission would have to get ~2600 billion plays to get $10 million.

Something doesn't seem right with those numbers.

There are people on forums doing the same thing as the person in the submission. 1 person with ~30 phones can generate about 15-20k streams in a day doing it manually.

Humble brag alert

Probably the bots listening part. The point for the royalties is to get people to use the software and pay for it

but totally fine when so many other media companies do it?

Do other media companies create fake streams?

Fraud is the crime of obtaining money or property by deceiving people. He deceived streaming platforms, as he botted his songs in order to earn royalties.

The whole "AI" thing is irrelevant; it'd be the same situation if he manually produced all his music.

Yeah, it's an exploit but it doesn't seem illegal. It seems like the issue is with whatever service. They need to fix their contract or their software. Maybe it is in the contract or EULA that you can't do this sort of thing already though, in which case it's fair game.

The bots faking real users' streaming to gain profit is the questionable part. AI generated cheap content (created en masse for profit) will be the norm soon. If you think about it, quality content is already the exception.

People who are not part of the wealthy elite stealing profits is illegal. Doesn't matter what the method was.

Bot listening is probably fraud.

Probably against the TOS, though, meaning the money paid was never owed, could get it into fraud

uh, yes? it's at the least fraud fs? the article says the doj is charging mike smith with three money laundering charges and one count of wire fraud. obviously the wire fraud charge comes from an argument that smith defrauded the distribution companies into illegitimately paying out royalties for false streams. note that the artificial intelligence solution only comes into the argument for the purposes of how he committed the crime, it really had nothing to do with the crime itself, at least intrinsically. if you read the press release from the doj, you can see that they make a pretty airtight argument that, quote:

SMITH made numerous misrepresentations to the Streaming Platforms in furtherance of the fraud scheme. For example, SMITH repeatedly lied to the Streaming Platforms when he used false names and other information to create the Bot Accounts and when he agreed to abide by terms and conditions that prohibited streaming manipulation. SMITH also deceived the Streaming Platforms by making it appear as if legitimate users were in control of the Bot Accounts and streaming music when, in fact, the Bot Accounts were hard coded to stream SMITH’s music billions of times. SMITH also caused the Streaming Platforms to falsely report billions of streams of his music, even though SMITH knew that those streams were in fact caused by the Bot Accounts rather than real human listeners.

SMITH’s hundreds of thousands of AI-generated songs were streamed by his Bot Accounts billions of times, which allowed him to fraudulently obtain more than $10 million in royalties.

it is not illegal to lie. it is absolutely illegal to lie for the purposes of financial gain. sure, i'm not disagreeing that what he did could not somehow be construed as something of a robin hood character arc (even tho he most certainly did this for the purposes of his own personal enrichment). but he almost definitely is guilty of the wire fraud charge and i do have a strong feeling, based on the prosecutorial level of this case, the involvement of a specialized division of the fbi, and his purported co-conspirators; that the money laundering charges are ironclad as well. frankly, i'm hoping his co-conspirators actually do end up going to trial and we get to learn what the company that aided in his fraud actually was. on fucking god it'd be one thing if he ran this grift machine for a little while, paid off a lil bit of his debts and all, maybe even lived off of it. but to steal $10 million fucking dollars with it, even when he knew he was committing fraud and had to explicitly hide his criminal activity??? no shit the fbi was hot on your trail. what an absolutely, colossal dipshit michael smith must be. i respect the ingenuity but it is so blindingly obvious that 10 million dollars was egregiously too many times to press a "free money button" you just invented in a capitalist autocratic hellscape.

QUICK EDIT: i do just wanna say also i did not downvote u/shani66 and i just wanted to contribute to discussion. just noticed after i posted someone had downvoted them which is kinda goofy of whoever that is.

According to the article, they're going for multiple counts of money laundering and wire fraud with 20 years each.

<play rock guitar riff>

^

Futurama had it right, spammers are the ultimate destroyers.

Do they insert advertisements?

If so then the real fraud is false viewings of advertisements.

Which upsets the advertisers of course.

3rd sentence of the article:

Indicted on three counts involving money laundering and wire fraud, the Charlotte-area man faces a maximum of 20 years per charge.

If you follow the article to the press release:

SMITH, 52, of Cornelius, North Carolina, is charged with wire fraud conspiracy, which carries a maximum sentence of 20 years in prison; wire fraud, which carries a maximum sentence of 20 years in prison; and money laundering conspiracy, which carries a maximum sentence of 20 years in prison.

It's fraud I'm assuming. They fake "plays" for Spotify to reward by sending payment, but these plays were people that did not exist. Spotify was paying for ghosts to essentially steam music

As fuck. Use the system they built against them. All day.

Yes but you see the companies he defrauded are big and he is small.

Dude, the music industry was accusing the US public of theft of music worth hundreds of trillions of $$$ back in the early 2000s. They started mailing random people with $250,000 fine PER SONG PIRATED. I had a friend with like half the Amazon music library on his home computer.

They do not fucking care and yes, have lobbied every politician and AG to be in their pockets.

I don't buy that. I think it's fraud. Yeah, the victims of the fraud are not nice people, but the law is supposed to protect all, not just the nice people. This isn't "gaming the system," it's fraud. Uploading the AI-generated songs is fine. The problem was the fake listeners. That's where the real fraud is.

My city has a modest bus service they contract out to a private company to operate. At the front of the buses, there are scanners that count the number of people that enter the bus. These passenger counts are then baked in to what the company is paid for their services to operate the city's bus system.

In theory, the contractor company could park a bus somewhere, set up a conga line of people, and just have thousands of phantom passengers board a bus, and then try to bill the city based on these inflated statistics. If they did that, I would absolutely hope they would be charged with fraud.

The law isn't stupid. There's a reason laws are enforced by judges, not algorithms. What this person did was little different than hacking a bank account and just stealing money from it. Yes, you could say, "they didn't do anything wrong, they're just gaming the system!" You could just as well call guessing someone's password and stealing their money "gaming the system." After all, is there anything on the bank's login page that explicitly tells you not to enter someone else's account and transfer their money to yours? No judge in a million years would buy that.

This was effectively just a hack. This guy had to create thousands of phantom people to pretend to listen to songs. He was clearly not making any good-faith attempt at making music and was just trying to exploit a weakness in their system design to extract money from them that he didn't earn. The law thankfully doesn't work on a standard of "well, they never told me I couldn't." Cases like this take into consideration the totality of the circumstances and weigh whether it is fraud or not. And this? This wasn't some clever technicality a legit artist used to boost their earnings. This was unambiguous fraud.

I really don't see how this is any different from pretending to be someone else to access their bank info, conning someone out of money by pretending to be a person in need, deep-faking someone's voice to get their relatives to send money to you, or a hundred other scams involving fake identities. Yes, the victim in this case is a villain themselves, but that doesn't make it any less a crime.

Song names sound a lot like brands in the first three pages of an Amazon search results.

😐

The headline focuses on the wrong thing. Making a bunch of crappy songs and uploading the to Spotify and other streaming services is perfectly legal, AI or not.

The illegal part is that he created lots and lots of fake accounts that constantly streamed his songs and masked them to look like authentic listens. So much so that he was making $110k per month. That is straight-up fraud, which is what he was arrested for.

It has nothing to do with AI, but that makes more people click on the article.

most lilely money laundering. Not really a new scam just adding AI to an old one

https://youtu.be/et8R5i5UEjY

If he already had millions in the bank the lawyers would have made this go away before anyone in the public would have noticed.

Spotify might as well be doing this themselves already to avoid having to pay all those annoying artist

Aside from "ai" it was just as possible 5 years ago. There have been algorithmic random music generators around for at least a decade, and click bots have been around since at least the 90s

Of course it would have been possible. It would have been possible even like 100 years ago because we had the same alphabet and newspapers and headlines were a thing.

i saw that on drew gooden's video and it seems undeniable