Michael Smith, 54, from North Carolina, defrauded streaming platforms and musicians of royalty payments. He was sentenced to 1 year and 6 months in prison. In addition to the sentence, he received two years of supervised release and must forfeit $8,091,843.64.

Some of the major streaming platforms include YouTube Music, Amazon Music, Apple Music, and Spotify. These streaming platforms pay out mechanical royalties to rights holders. A rights holder is an entity/person that holds the rights to distribute, publish, and/or own the work. When a song is streamed, a small amount is paid out.

One stream roughly pays out about $0.003 on Spotify. Spotify has a Spotify Royalty Pool. The Spotify Royalty Pool pays rights holders, which are the publishing company or record label. From there, it pays out different royalties, such as performance, mechanical, and recording royalties.

Smith managed to create thousands of fraudulent accounts on these streaming platforms and thousands of songs, starting in 2017. The accounts used software that streamed his inauthentic songs. The songs were produced with super intelligence. Smith used 10,000 bot accounts, created fraudulent email accounts, and claimed debit cards for fraudulent accounts.

Inauthentic businesses receive royalties from the Royalty Pool with the help of their inauthentic consumers, while authentic artists withdraw from the same royalty pool.