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Man Arrested for Creating Fake Bands With AI, Then Making $10 Million by Listening to Their Songs With Bots

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.

jordanlund ,
@jordanlund@lemmy.world avatar

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.

Sterile_Technique ,
@Sterile_Technique@lemmy.world avatar

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.

Tire ,

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.

PlantDadManGuy ,

I’m not a lawyer but this sounds like a pretty textbook definition of fraudulent business practice to me.

badbytes ,

The guy sounds like a great entrepreneur.

Tire ,

If he already had millions in the bank the lawyers would have made this go away before anyone in the public would have noticed.

BananaTrifleViolin ,

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.

ayyy ,

Yes but you see the companies he defrauded are big and he is small.

WoodScientist ,

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.

RangerJosie ,

So why arrested? This is what AI is for right? Oh, he screwed over the wrong people didn’t he?

finley ,

it’s because his name isn’t NVidia

pete_the_cat ,

Or Google/Reddit/Meta.

TheReturnOfPEB ,

Or screwed everyone over too little; if he had screwed everyone for 10 billion he would be heralded as a genius.

RangerJosie ,

Would been on the cover of Forbes.

Kolanaki ,
@Kolanaki@yiffit.net avatar

Stealing is only wrong if you steal from rich people. It’s perfectly acceptable if the victims are poor. /s

RangerJosie ,

Not /s sadly.

Just look at Bernie Madoff.

NegativeInf ,

Looking at you Thomas Kincade. Investments my ass.

Hikermick ,

The same Bernie Madoff that died in jail?

RangerJosie ,

Yes. He got locked up for stealing from rich people.

SendMePhotos ,

Was anyone really stealing? The ads were served, right? The checks for the ads were paid.

emax_gomax ,

I hate ads but their designed to be shown to people and intentionally using bots to inflate ad views is very clearly fraud. Silicon valley had something similar with bot farms to fake user engagement to take in VC funding. You take money in exchange for some kinda engagement metric which you’re faking.

RangerJosie ,

Yeah. I’m totally cool with ripping off advertising companies.

Fuck them in particular.

SendMePhotos ,

Ah shit. You’ve got a legal point.

NeoNachtwaechter ,

The ads were served, right?

No, and that’s exactly the point that makes it a fraud (not stealing)

Allonzee ,

In addition to the others that replied to you:

theguardian.com/…/malta-car-bomb-kills-panama-pap…

The owners made an example of the journalist that broke the Panama Papers story.

protist , (edited )

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

lunarul ,

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.

stoly ,

This is going to be something like fraud, larceny, etc.

bdonvr ,

I don’t think the illegal part has anything to do with the AI

smokin_shinobi ,

How is it illegal? And how much did it cost him to make it work I wonder.

HappyTimeHarry ,

most lilely money laundering. Not really a new scam just adding AI to an old one

youtu.be/et8R5i5UEjY

Ilovethebomb ,

It’s not money laundering, they were creating fake engagement and getting advertising revenue out of it.

Badeendje ,
@Badeendje@lemmy.world avatar

Could be if the revenue was paid out to non existing aliasses and then transferred to himself.

But getting paid royalties directly by Spotify would not need to be laundered as it’s legit money for the irs.

Ilovethebomb ,

Yeah, it’s just a good old fashioned grift by the sound of it.

HappyTimeHarry ,

getting bots to fake engagement for a profit is money laundering, believe it or not. its a pretty vague crime that basically amounts to getting paid in a way thats deceptive.

Ilovethebomb ,

Hmm. If that’s true, the legal definition and the definition we typically use are very different.

Vent ,

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.

Underwaterbob ,

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.

NineMileTower ,

Humble brag alert

Bytemeister ,

Send me a link and I can get you to ~12 million and 1 listens.

UnderpantsWeevil ,
@UnderpantsWeevil@lemmy.world avatar

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.

magnetosphere ,
@magnetosphere@fedia.io avatar

Fuck it. This scam was clever enough that I appreciate and sorta admire it.

AstralPath ,

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.

emax_gomax ,

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.

stoly ,

It’s like the person who figured out the free gas card hack and let her friends use it. If she’d kept it herself, she’d still get free gas.

Tarquinn2049 ,

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.

ChickenLadyLovesLife ,

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.

LordWiggle ,
@LordWiggle@lemmy.world avatar

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)

Leate_Wonceslace ,
@Leate_Wonceslace@lemmy.dbzer0.com avatar

I think you’re confused about who got hurt by the scheme. Billion dollar streaming platforms fucking over artists don’t need to be defended.

AwesomeLowlander ,

Who’s defending the streaming platforms?

LordWiggle ,
@LordWiggle@lemmy.world avatar

If you read my comment again, you can see I noted that Spotify is in on it. They profit too from these schemes. All those bots listening to 30sec AI songs playlists are running on Spotify premium accounts so Spotify won’t do anything to fight fraud. They take 30%.

I never defended any platform, I only defended the artists. So I guess the confused one is you, my friend.

laranis ,

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.

LordWiggle ,
@LordWiggle@lemmy.world avatar

See this video for more info about these scams and how Spotify is enabling them and protects them.

magnetosphere ,
@magnetosphere@fedia.io avatar

Ah. I thought this was an isolated incident. I understand, and agree with, your point.

MentalEdge , (edited )
@MentalEdge@sopuli.xyz avatar

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.

Starbuncle ,

The solution, to me, would seem to be to divide the revenue up on an individual basis instead. Does some sort of licensing issue prevent this? I’d think that the legitimate record labels would want to fix this loophole ASAP so that they can get more money.

MentalEdge ,
@MentalEdge@sopuli.xyz avatar

AFAIK YT Music does this. The money from your subscription gets divided amongst whatever you listened to.

That still wouldn’t address the stolen account problem, but yes, it’d be a huge improvement.

I have no idea why Spotify still sticks to this massively exploitable model, except for the fact that it MASSIVELY inflates their stats for investors and advertisers.

Starbuncle ,

exceot for the fact that it MASSIVELY inflates their stats for investors and advertisers.

Ah yes, the Reddit strategy.

magnetosphere ,
@magnetosphere@fedia.io avatar

I didn’t realize it was a thing. Thanks for taking the time to explain!

tomkatt ,

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?

DoucheBagMcSwag ,

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

hayes_ ,

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.

tomkatt ,

Ah thanks. I didn’t follow to the release page and just skimmed the article, should have read closer.

GBU_28 ,

Those are the charges yes, but how is this any different than what all sorts of corporations do

aphonefriend ,

The difference is he was a poor trying to pull himself up. Corporations are glorious entities that can do no wrong in American law.

Fedizen ,

there needs to be a law that in order to sell something in a store a real person needs to examine it.

JeSuisUnHombre ,

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.

KnightontheSun ,

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.

Crozekiel ,

So are we committing fraud if we turn on Spotify and leave it playing in an empty, sound-proof room??

That contractual agreement has nothing to do with the user or artist, its between advertisers and the platform. That can’t be what they got this guy for.

KnightontheSun ,

Not sure how all that can be separated out meaningfully as it is the platform being used and advertisers have expectations based on whatever agreement has been struck between them. Maybe I misunderstood. Perhaps the difference in your example is a user acting versus a bot? Intent probably comes up somewhere as well, but I am not a lawologist. 🤷‍♂️

CrimeDad ,

Free him

Etterra ,

Honestly I don’t think this should be a crime.

MentalEdge ,
@MentalEdge@sopuli.xyz avatar

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.

aesthelete ,

Finally a use case for AI.

Sanctus ,
@Sanctus@lemmy.world avatar

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!

RangerJosie ,

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?

Sanctus ,
@Sanctus@lemmy.world avatar
RangerJosie ,

I firmly believe that VR won’t have fully developed until we have power gloves that work like they did in those commercials.

Ilovethebomb ,

People would very quickly figure out all the adverts being streamed to those accounts weren’t translating into sales, and they’d know something was amiss.

lemming741 ,

How do you prove that your ad campaign is working?

That’s the neat part- you don’t!

freakonomics.com/…/does-advertising-actually-work…

Kyrgizion ,

110K/mo was bound to attract attention. So, purely hypothetically, uhh, what would the lowest cutoff be before eyebrows start raising?

blockheadjt ,

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.

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