Co-Conspirator Details Emerge in Massive Streaming Fraud Indictment — MLC’s Credits Database Attributes 202,000 Works to the Defendant

New details have come to light about the co-conspirators in an alleged music streaming fraud scheme. Photo Credit: Austin Distel

Yesterday, a North Carolina-based musician was indicted for allegedly facilitating a massive streaming fraud scheme for the better part of a decade. Now, new details – among them the name of the prominent AI-company head with whom the defendant allegedly conspired – are coming to light.Those details are emerging in reports from outlets including Billboard, after one Michael Smith was slapped with wire fraud and money laundering conspiracy charges. We covered the allegations, for which Smith could serve up to 60 years behind bars if found guilty on all counts, yesterday.

In short, though, the defendant allegedly masterminded a multimillion-dollar streaming fraud operation under which he used bots to play AI-created tracks billions of times in order to collect the resulting royalties.

Importantly, while the sole defendant is alleged to have organized the scheme, the indictment doesn’t claim that he acted alone. Rather, the Cornelius, North Carolina-based producer allegedly coordinated with “the Chief Executive Officer of an AI music company” and “a music promoter” to create the hundreds of thousands of songs that made the scheme possible.

The indictment doesn’t name the individuals, and the Mechanical Licensing Collective (MLC), which is said to have halted royalty payments to the defendant in March of 2023 due to fraud suspicions, told us it was “unable to comment beyond” the official statement put out by CEO Kris Ahrend.

With the benefit of newly available information and hindsight, we can see that the streaming fraud suspicions were well-founded to say the least – even if interesting questions remain about the charges and the nature of the alleged crimes.Hardly opting for a subtle approach, the defendant, having evidently raked in recording and compositional royalties alike, is registered in the MLC database as a writer on a staggering number of works.

Specifically, an astonishing 201,944 “creations” in the MLC database are attributed to Michael Anthony Smith. And as the aforementioned Billboard pointed out this afternoon, Indiehitmaker founder Bram Bessoff and Alexander Mitchell (the founder and CEO of Warner Music-partnered AI music generator Boomy) are billed as co-writers with Smith on thousands of works.

Admittedly, the scope of these joint credits seems relatively small; bearing in mind the almost 202,000 works tied to Smith, Bessoff’s associated with 5,118 works in the MLC database, against 5,119 for Mitchell, search results show.

It’s unclear whether the north of 200,000 AI-generated tracks are included in the 20.16 million songs that Boomy’s created (according to its website, that is) thus far. But in any event, just at the top level, the facts raise interesting questions about the unprecedented impact of the AI music explosion as well as the revenue sources behind it.

Bessoff has opted against publicly addressing the information, reportedly due to “his cooperation in the ongoing investigation.” However, Mitchell in a statement said he was “shocked” with the indictment and insisted that Smith had “consistently represented himself as legitimate.”Moving forward, it’ll be worth keeping an eye out for additional charges, possible effects on the AI music space, and, perhaps most notably, the defense of Smith. There are, of course, serious ethical issues with using bots to rack up streams on artificial intelligence tracks.

Nevertheless, time will tell if the defendant (possibly taking a page from the book of the individual charged in Denmark for alleged streaming fraud) and his counsel attempt to paint the relevant laws as less clear-cut than those covering more traditional crimes.

Furthermore, the case may also be made that this isn’t entirely a criminal matter owing to the legitimate sources from which the cash was allegedly swindled.