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Michael Smith, a North Carolina medical clinic owner, has been arrested as part of the first AI streaming fraud case in the U.S., accused of generating over $10 million through fraudulent means. According to federal prosecutors, Smith allegedly deployed software bots to artificially inflate stream counts of AI-generated music, leading to a reported billion streams but no actual fan engagement.
Smith and collaborator Jonathan Hay released a jazz album, "Jazz," in 2018, which initially gained popularity but vanished from charts shortly after. Suspicion grew when analytics indicated a peculiar listening pattern concentrated in unexpected regions like Vietnam. Investigations revealed that Smith directed staff at his clinics to stream the tracks, resulting in streaming service flags for fraudulent activity.
The Boston-based AI song generator Boomy, linked to Smith, produced thousands of tracks that were assigned to fictitious artists with bizarre names, further complicating the scheme. Smith pleaded not guilty, while Hay, who claims ignorance of the fraud, has cooperated with authorities and expressed relief at the investigation.