From Music Business Worldwide · · 1m 50s
Streaming Fraud Scheme Details
Michael Smith sentenced for $8M music streaming fraud using bot accounts.
In brief
Michael Smith sentenced for $8M music streaming fraud using bot accounts. Michael Smith faces 46 months in prison for orchestrating a bot scheme that generated $8.09M in fraudulent streaming revenue across 300,000 tracks. Originally reported by Music Business Worldwide.
First criminal case
Michael Smith is due to be sentenced in Manhattan federal court on Tuesday, October 6, 2026.
Plea agreement
Smith pleaded guilty on March 19, 2026 to a single count of conspiracy to commit wire fraud under 18 U.S.C. § 371.
Reduced charges
The plea replaced three counts from September 2024 that carried 60 years between them.
Prosecution request
Prosecutors are asking for at least 46 months in prison for Smith.
Pro rata model
Streaming services use pro rata to allocate revenue from streams without fixed per-stream pricing.
Fraud mechanism
Fake streams dilute real streams by shrinking each track’s revenue share across the pool.
Two pipes
Sound royalties flow to labels via Spotify; publishing royalties go to PROs through The Mechanical Licensing Collective.
Bot setup
Smith used 52 cloud accounts with 20 bot accounts each for 1,040 total bot accounts.
Daily streams
Each bot account streamed 636 songs daily, totaling 661,440 streams per day.
Half-cent rate
At 0.5 cents per stream, Smith’s monthly earnings were $99,216 and annual earnings $1,207,128.
Two plays a day
Smith’s scheme spread 661,440 daily streams across 300,000 tracks, averaging two plays per track per day.
Why 46 months
The government claims Smith caused $8.09M in losses, leading to a 46-month prison sentence.
Spotify threshold
Spotify requires 1,000 streams in the prior 12 months before earning royalties for a track.
Rule change impact
Smith’s scheme would have been caught by Spotify’s threshold as tracks averaged 805 streams per year.
The headline
Michael Smith faces 46 months in prison for orchestrating a bot scheme that generated $8.09M in fraudulent streaming revenue across 300,000 tracks.
