News
AI-song bot streams draw 18 months in prison. The sentence matters for distributors and royalty splits (first U.S. criminal streaming-fraud term)
On Tuesday afternoon 6 October 2026 (U.S. Eastern), Judge John G. Koeltl in Manhattan federal court sentenced Michael Smith to 18 months’ imprisonment plus two years of supervised release and ordered forfeiture of $8,091,843.64. Guilty plea: 19 March, one count of conspiracy to commit wire fraud. Follow-up to this site’s pre-sentence notes: the term is now set.
What happened
On Tuesday afternoon 6 October 2026 (U.S. Eastern), Judge John G. Koeltl in Manhattan federal court sentenced Michael Smith to 18 months in prison and two years of supervised release. Smith pleaded guilty on 19 March to one count of conspiracy to commit wire fraud (five-year statutory maximum). The court also ordered forfeiture of $8,091,843.64.
What changed
This site already covered the 26 September defense ask for probation and the 3 October report of prosecutors seeking at least 46 months. This note is the sentence: 18 months, not the ask. Prosecutors wanted at least the 46–57 month guideline floor; Probation recommended 24 months; the defense asked for probation. SDNY calls it the Justice Department’s first criminal case of AI-assisted music streaming fraud.
Whose work this affects
Distribution and royalty splits. The term is now a fact: buying plays or using bots to drain the royalty pool can end in prison time in this case. Counsel argued that, at the start, platform terms did not expressly ban bots; prosecutors pointed to false statements to distributors. The government’s letter treats royalties as paid pro-rata from a finite pool, so fake streams cut other rightsholders’ shares. Not legal advice.
Do this today
Open your distributor’s artificial-stream inquiry screen and record, today, whether your catalog shows purchased plays or bot use. If an inquiry is already open, log the reply instead of leaving it.
Sources
Primary: SDNY U.S. Attorney press release (6 October 2026, no. 26-284). Courtroom sentence: Rolling Stone (same day, secondary). Guideline ask: government sentencing letter in United States v. Michael Smith, 24 Cr. 504. Clickable URLs at the end.
Source: U.S. Attorney's Office, SDNY