Man Arrested for Creating Fake Bands With AI, Then Making $10 Million by Listening to Their Songs With Bots
Man Arrested for Creating Fake Bands With AI, Then Making $10 Million by Listening to Their Songs With Bots
An alleged scammer has been arrested under suspicion that he used AI to create a wild number of fake bands — and fake streams to with them.
The songs that the AI CEO provided to Smith originally had file names full of randomized numbers and letters such as "n_7a2b2d74-1621-4385-895d-b1e4af78d860.mp3," the DOJ noted in its detailed press release.
When uploading them to streaming platforms, including Amazon Music, Apple Music, Spotify, and YouTube Music, the man would then change the songs' names to words like "Zygotes," "Zygotic," and "Zyme Bedewing," whatever that is.
The artist naming convention also followed a somewhat similar pattern, with names ranging from the normal-sounding "Calvin Mann" to head-scratchers like "Calorie Event," "Calms Scorching," and "Calypso Xored."
To manufacture streams for these fake songs, Smith allegedly used bots that stream the songs billions of times without any real person listening. As with similar schemes, the bots' meaningless streams were ultimately converted to royalty paychecks for the people behind them.
So why arrested? This is what AI is for right? Oh, he screwed over the wrong people didn't he?
Or screwed everyone over too little; if he had screwed everyone for ten billion he would be heralded as a genius.
Would been on the cover of Forbes.
Stealing is only wrong if you steal from rich people. It's perfectly acceptable if the victims are poor. /s
In addition to the others that replied to you:
https://www.theguardian.com/world/2017/oct/16/malta-car-bomb-kills-panama-papers-journalist
The owners made an example of the journalist that broke the Panama Papers story.
it's because his name isn't NVidia
Or Google/Reddit/Meta.
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.
Exactly. He “stole” millions from companies stealing billions, and thus was eaten.
I don't think the illegal part has anything to do with the AI
This is going to be something like fraud, larceny, etc.
Fuck it. This scam was clever enough that I appreciate and sorta admire it.
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.
I didn’t realize it was a thing. Thanks for taking the time to explain!
It seems like it would be super easy for them to close this loophole. If you use the model that free tier listeners (real ones) will listen to about the same distribution of songs as the paying listeners, then just stop counting all free tier listeners and multiply the amount paid out for the pay-tier listeners by an appropriate factor to make payouts the same as before.
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 imagine quite a few folks have done this. You don't hear about everyone that got away with it but you definitely hear about those that get caught.
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.
There was a guy who robbed banks and he wasn't caught for decades because he just lived an ordinary working-class lifestyle. Cheap little apartment, no fancy car etc. etc.
Once you have to put that amount of effort and attention in for a reasonable income... you are just doing a job.... a job no-one benefits from. So it won't be satisfying to do. No longer beating the system, just beating 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)
When I first read your comment about this scheme keeping money from artists I was skeptical. But, yup! It is right there on Spotify's website:
We distribute the net revenue from Premium subscription fees and ads to rightsholders.
Now, granted a bunch of those "rightsholders" are likely big corporate record labels but your point stands. The little guy is getting screwed, too.
Though, adding to your final thought, I bet if it was only the little guy getting screwed and not the corpos I bet DOJ wouldn't have cared.
Not sure how this is a crime... breach of TOS, sure, but a crime?
What law is being broken here?
If his fake bands are being paid for bot clicks, that's a problem for the platforms to figure out. They need to examine their TOS.
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.
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.
There are far too many loopholes for me not to hate companies be they small or large.
In Australia, "family trusts" are a sure way to write off a good chunk of your expenses (groceries, fuel and so on) while paying yourself a wage. If you really want you can cook the books taking cash sales for yourself too.
Don't forget about "taking" whatever you want from the company, and writing that off as a loss.
Maybe I should hate people, but in a vacuum people are reasonable, logical and honorable. But once we introduce a "well maybe" or an "but what if I were to purchase fast food and disguise it as my own cooking?" my view of people becomes skewed.
I guess, I wanted to vent about how fucked everything seems to be and that I feel powerless to do anything about it. GameStop as a company probably deserve the rocks in boxes, Amazon deserve them too, all because people are running those companies.
I'm not above greed, but I'd like to think / feel that I put out more than I take and it seems quite uncommon in our modern society.
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
theiryour money".
This is what Spotify was made for so I dont really see the issue. He made the music and the listeners, just look at that engagement you love so much!
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?
He found a flaw in the system and exploited it. Although he didn’t do anything particularly wrong, the tools he used allowed him to do it. Yet, somehow he has to pay the consequences and the companies that made the tools to exploit the system are not liable. Got it.
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?
They wouldn't be real capitalists (and boomers) if they didn't pull the ladder up behind them.
The "selling things online" idea had been tried repeatedly before Amazon, and always failed. What Bezos did was find a way to actually (eventually) make money at it. That was a business strategy tour de force that was quite impressively executed. That's not to say that Bezos is a good employer or a nice person. But it's often the case that it's not the originality of the idea that matters, as much as how it's executed.
What.
If he used python for creating the bots, should python creators go to jail?
Only if Guido developed Python with the specific and exclusive intent being that it should be used for that purpose, and even then it wouldn't be an open-and-shut case. And since it was developed over 25 years ago, that's more than a bit unlikely.
Wow. I'm a hobbyist musician. I have ~12 million listens across various streaming services and have made a whopping $45 in the two years since I finally released ~25 years worth of material. (Which is a lot of why it's my hobby and not a living.)
I can't imagine the numbers this guy had to pull off to make that much.
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.
I have to wonder about the logistics. He can't be running them on his own single Internet connection. Or could VPNs handle it so it would appear his listens are coming from all over the world? $10M is a lot of money. How long did it take to amass that?
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.
Maybe some kind of increasing scale for revenue depending on larger numbers of listens.
My break down by track is pretty inconsistent, too. I've got a single track with over a million listen that made me 36 cents. My most popular track has over 4M listens, and it's responsible for half that $45. Distrokid doesn't say which streaming service that revenue comes from, either. Some pay more than others, I imagine.
How is this illegal? Sounds legit to me.
I use AI to answer ai generated emails at work all the time. I also use AI to design buildings that will never house people, but computer systems. It's all a shell game folks!!!
Probably the bots listening part. The point for the royalties is to get people to use the software and pay for it
oh look they care about it now it's affecting them
Honestly, what did he do wrong? He made crappy cheap music and listened to it using AI and bots. listening to it must have cost him subscription money, so I guess he just listened enough to get the songs popular enough so that other would listen, and they did and everyone made money.
Yeah, it's all cheap shit but it's wrong when he does it but totally fine when so many other media companies do 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.
Exactly, I don't think there was anything illegal here. At best it's breach of contract with Spotify or whoever, and they could get sued. MAYBE there's some interpretation of fraud that could apply? But it's not like he sold anything and misrepresented it.
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.
Lawsuit, sure, but is it actually illegal?
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
That's still civil. I think this is just a case of fraud plain and simple.
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.
Can you imagine how exciting it would be though when this actually started to work? This probably started as a side project, with a dude saying like, nahhh this could never work.
Until suddenly it did
<play rock guitar riff>
i mean this is the system we got set up isnt it?
The butlerian jihad is missing the point here.
The fraud is using bots (not AI just plain python with selenium or something like that. Sorry) for making fake listeners.
AI here is just some coat to hide the fraud a little better, but nothing more.
^
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.
Maybe a stupid question but.... what exactly was illegal about this? I'm sure there were ToS or EULAs violated, but what law is he being charged on?
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
Maybe he broke terms of service with the streaming companies but they should be pursuing him in civil courts. This feels like abuse of the criminal justice system to retrieve money for companies that were negligent in how they were running their streaming businesses.
This guy produced music and he alsp streamed the music even if it was bots at industrial scale. He seemingly met the criteria needed to get money from the streamers. I'm not a lawyer at all but on cursory look at the definition and elements of wire fraud, I guessing this will hinge on whether this was a "material deception" - but he produced actual music and he streamed it, so is it?
Also i wonder whether it can be proven that the intent was to "defraud" rather than take advantage / game a system.
It feels like the tax payer is bearing the cost of prosecuting someone for a dispute between a person and the multi billion dollar music industry.
Also the music industry trying to paint this as theft of money from other artists is a bullshit - the streaming fees are supposedly divided out proportionately from overall streaming. He caused more streaming so the pot was bigger, and he took a proportionate share of that bigger pot. And any disproportionate sharing reflects the shitty practice's of the streamers and the big music rights holders who are essentially monopolies squeezing out the smaller competitors from the system.
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.
If your business model allows somebody to game you like that, you kind of deserve it tbh.
It shouldn't be based on plays. It should be based on money made from a customer and divided between what they listened to/watched. But then you wouldn't make as much money from the people that forget to use their subscriptions, which is probably a huge chunk of their revenue.
Song names sound a lot like brands in the first three pages of an Amazon search results.
😐
Can I interest you in a FCVTRHJR HDMI cable?
bro found a glitch in the system
Its subtle, but the tone of that article's coverage actually sucks... Is futurism a piece of shit?
What a waste of my tax dollars by the DOJ to try to recover spotify´s money for a broken system that they left open and are honestly probably exploiting themselves in parallel to inflate engagement numbers and take streams away from legit artists that they have to play. Remember, they want you in their app, they don't give a shit about actual music. If you'll just listen to random boops, they save cost in the middle. Not where I want the justice systems effort to go.
How is it illegal? And how much did it cost him to make it work I wonder.
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
The guy sounds like a great entrepreneur.
If he already had millions in the bank the lawyers would have made this go away before anyone in the public would have noticed.
Finally a use case for AI.
Spotify might as well be doing this themselves already to avoid having to pay all those annoying artist
Yeah, a streaming service with the hit songs like "Zyme Bedewing" from everyone's favorite artist "Calorie Event".
A headline that wouldn't have been possible five years ago. Sick.
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.
Still better than the theory that Spotify itself is making AI jazz and putting them on their oficial playlists to not pay artists.
i saw that on drew gooden's video and it seems undeniable
Indicted on three counts involving money laundering and wire fraud
Oops. Picked on the big dogs by playing their own game.
Seriously though, probably more going on than what we read here.
I thought about experimenting with this (Guess it is a good thing I didn't). There are so many low effort "Lo Fi" types of streams and tracklists on Spotify and elsewhere. Who is to say my software generated garbage would be any worse than those?
There are also YouTubers who generate low effort music and ask their normal content subscribers to stream their shit on Spotify even if they aren't legitimately listening. So are those streams fraudulent as well?
It sounds like the thing he is getting popped for is the volume of automated streams.
The band Vulfpeck made a silent album named sleepify and asked their fans to stream it while not listening to other music. Made enough money to fund a tour. Spotify change their terms because of it i believe.
Gonna miss having Zyme Bedewing on my Playlist.
I'm weirdly creeped out about how this article refers to him as "the man". Was this written by an AI?
I don't see how this is money laundering or wire fraud. I hope he gets off. Or the real best solution would to make it so the revenue just goes to the artists the AI is ripping off.
My understanding is that the contractual agreement with advertisers is that they pay to reach ears. The ads did not reach any ears as promised which could be equated to fraud.
Free him
to head-scratchers like “Calorie Event,” “Calms Scorching,” and “Calypso Xored.”
As a fan of the Osees, those sound perfectly normal.
Honestly I don't think this should be a crime.
No.
By inflating his own playcounts, the value of each play goes down. All that money he got? Came straight out of the pockets of real artists.
Unfortunate that he got caught. He was simply playing the same game the corps do but since he isn't mega rich he gets punished.
If he had been using the streams to train new AI bands, then that's just using resources to develop a product.
110K/mo was bound to attract attention. So, purely hypothetically, uhh, what would the lowest cutoff be before eyebrows start raising?
Try 50k, with more realistic artist names, and more varied song names. Then you can bump the number up subsequent months, with the occasional drop sprinkled in for realism.
"What are you in for?"
So it's OK if you are a real artist?
I think the Botting of streams to game the royalties is the bit they don't like.
Obviously it would be a beach of t&cs
I've never heard of someone being arrested for breaching ToS though. They could be sued for breach of contract, but that's it. So far the only thing I could think of is if the bots were illegally acquired by hacking devices or something. There's nothing illegal about paying for a server and having it download free Spotify streams.
SMITH created thousands of accounts on the Streaming Platforms (the “Bot Accounts”) that he could use to stream songs. He then used software to cause the Bot Accounts to continuously stream songs that he owned. At a certain point in the charged time period, SMITH estimated that he could use the Bot Accounts to generate approximately 661,440 streams per day, yielding annual royalties of $1,207,128.
From the original press release: https://www.justice.gov/usao-sdny/pr/north-carolina-musician-charged-music-streaming-fraud-aided-artificial-intelligence
Kinda funny how the term "AI" drowns out all rational thought and reading comprehension. Of course, that's why it's there in the clickbait headline. I avoid news sources that pull that sort of thing. I don't appreciate being manipulated.
And he thought he could get away with it without bribing the politicians!
Calorie event?! Why not just call it a doughnut.
I would like that source code for… reasons.
This is the craziest fucking timeline.
It goes to show streaming services are not long for this world with the introduction of AI.
there needs to be a law that in order to sell something in a store a real person needs to examine it.
