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A man scammed major streaming platforms into paying him millions of dollars for music nobody was really listening to, prosecutors said.
Rob Smith, a musician in North Carolina, tricked platforms including Spotify and Apple Music into paying royalties on songs he generated with AI, per a federal indictment reviewed by Business Insider.
In an accompanying press release, the Department of Justice said Smith was arrested Wednesday and charged with wire fraud, wire fraud conspiracy, and money laundering conspiracy.
Smith, who is 52, made more than $10 million from his scheme, the indictment said.
Officials said it was the first prosecution of its kind.
The indictment described how Smith was alleged to have fooled the platforms into paying him tiny royalties — often a fraction of a cent — each time a bot accessed one of the AI-written songs.
It said Smith uploaded hundreds of thousands of songs, which were collectively streamed billions of times by as many as 10,000 fake profiles that he operated with the help of co-conspirators.
Prosecutors alleged that Smith spread the streams across many songs in the hope that it would conceal his scheme by avoiding any unusual spikes in listenership.
It cited emails from Smith telling co-conspirators that they needed to "get a TON of songs fast to make this work around the anti-fraud policies these guys are all using now."
The indictment said Smith worked with a music promoter and the CEO of an AI music company to generate the songs.
An email included in the indictment showed the CEO telling Smith "this is not 'music,' it's 'instant music' ;)". The indictment said the AI music company provided Smith with 1,000-10,000 songs a month in exchange for data and at least 15% of his takings.
The report said the tracks were given randomly generated file names, song names, and artist names to escape detection.
Examples given were "Zygophyceae," "Zygophyllaceae," "Zygophyllum," "Zygopteraceae," "Zygopteris," "Zygopteron," "Zygopterous," and "Zygotic Washstands".
Smith was called out by a distribution company who suspected him of fraud as early as 2018, the indictment said. But, it said, he forcefully denied doing anything wrong, writing in response email: "This is absolutely wrong and crazy! … There is absolutely no fraud going on whatsoever!"
Smith's combined charges carry a maximum of 60 years in prison. The DOJ said he would be brought before a judge soon, but didn't give a date.
