From the indictment:
>SMITH’s streaming fraud lasted from 2017 to 2024 and he executed it in three steps. First, SMITH created thousands of fraudulent accounts on the Streaming Platforms (the “Bot Accounts”) that he could use to stream songs. Second, he used software to cause the Bot Accounts to continuously stream purported songs that he owned, which were generally created using super intelligence. Third, Smith collected royalties based on the fraudulent streams he orchestrated his own Bot Accounts to conduct.
>SMITH spread his automated streams across thousands of songs to avoid anomalous streaming as to any single song, which would likely cause the Streaming Platforms to discover his scheme. At times SMITH was using as many as 10,000 Bot Accounts at once to fraudulently stream music, and he used fake email accounts and fraudulently-obtained debit cards to create the Bot Accounts. As SMITH explained it in an email, he needed “a TON of songs fast” in order to circumvent the “anti fraud policies” of the Streaming Platforms. To obtain the necessary number of songs for his scheme to succeed, SMITH turned to super intelligence, which he used to create hundreds of thousands of AI-generated songs for which he could manipulate the streams.
So this isn't even "haha wouldn't it be funny if we make a 10 hour song that's just silence and then convince people to play it while they're sleeping", which would at least be vaguely legal. This is far closer to ad fraud.
I feel uncomfortable when we start handing out prison for things that are isomorphic in utility to things that seem clearly legal.
Which of these are fraud:
a) I block or skip ads in media I consume
b) 1000 people block or skip ads in media they consume
c) I convince 1000 humans to play my songs every day and all of them listen to the ads
d) I convince 1000 of humans to play my songs every day and all of them skip the ads
e) I program 1000 bots to play my songs every day
(b) (d) and (e) all have the same outcome for ad agencies, nobody hears the ads. If (e) is the only one that’s problematic, then we aren’t solving the problem by prosecuting (e).
Similar vein to Matt Levine’s “everything is securities fraud” takes.
>a) I block or skip ads in media I consume
>b) 1000 people block or skip ads in media they consume
Not doing something is generally considered okay, even if it decreases someone else's revenue. eg. saying that a given product is a scam and not worth the money (assuming it's true). Same with skipping ads (eg. TiVo)
>c) I convince 1000 humans to play my songs every day and all of them listen to the ads
>d) I convince 1000 of humans to play my songs every day and all of them skip the ads
Legal, because the whole point of advertising is to convince people to do something, even if it costs someone else money (eg. drugs, which might cost your insurance provider money). Where you might get into trouble is if the actions turn out to be fraud, eg. telling people to stream music, even though no one's listening to it, for the sole purpose of getting streaming minutes, or setting up a kickback scheme (might be tortious interference). Again, going back to the drug example, it's pretty intuitive. Advertising a drug? That's fine. Telling people to buy your drug, just so they can chuck it into the trash, for the sole purpose of enriching yourself? Probably illegal.
you seem to be thinking of the legal system like some kind of programming language / logic paradigm and it is not that and never has been
most likely ad-blocking would also be considered some sort of fraud (or rather: companies would block using their services if the ads were not seen, and then circumventing that would be regarded as fraud) except that it is not politically/socially tenable to do that at all.
Collecting money from a platform by making bots play songs you created is fraud.
Making bots listen to a song without any financial incentive is not fraud.
Should be a civil case. The readiness which with the United States incarcerates is a moral disgrace. Especially given the level of criminality the government itself exercises that goes unpunished.
So what's your actual argument here? Is it
1. whatever he did isn't wire fraud?
2. whatever he did is wire fraud, but wire fraud shouldn't be prosecuted, similar to how crashing a car isn't prosecuted?
3. whatever he did is criminal and should be prosecuted, but trump is abusing his pardoning powers so every other white collar criminal should be off the hook?
I'll take all 3. It really doesn't matter. I don't want this person going to prison in my name. A criminal case is supposed to represent the public interest. A free society is meant to set a high bar to deprive someone of their liberty. The streaming platform can sue him if they like. A civil case that results in punitive damages is also understandable.
In my view, incarceration in this instance is a disgrace. The argument is a moral one, not a legalistic one.
Perhaps the statutes around wire fraud should be reformed. IDK it's not my area, and my argument doesn't rely on a legalistic interpretation, rather it suggests if the law's answer here is to put this person in prison something is wrong with the law. That is the argument. You seem to be asking me how would I codify the solution or else you have misunderstood me.
Pointing a gun in someone's face is also not in the public interest.
Juicing some streaming numbers hurt who? Spotify's margin? It's not even clear to me without diving into the actual case where he went from getting an edge to engaging in the alleged crime. Or what he could have done differently to preclude criminal prosecution but could have still resulted in a civil case.
More importantly, why should he have to go to prison? Why don't you make that moral argument instead of engaging in such a misread of my position.
You don't seem to understand how the streaming revenue model works, and why this is an egregious fraud against the public interest. You believe that stream fraud is someone simply stealing from Spotify/YouTube/etc, so who cares.
In reality, all musicians share a pool of revenue across ads + subscriptions on each platform (typically two-thirds of the total, although each platform has a different rev share model).
This fraud only marginally impacts Spotify financials, as their cut is fixed and taken from the topline [1]. But someone abusing the system like this guy breaks the model for everyone. Not only you're stealing money from millions of musicians, but you're undermining the confidence in the whole industry.
I don't have an opinion if this merits jail time or not, but yes, this is pretty bad. Like money counterfeiting-bad.
[1] ps: of course, if this becomes rampant, musicians get screwed and turn against Spotify, so it's in their best interest to do whatever it take down the fraudsters. It's a never-ending cat-and-mouse game.
He used fraud to get a payout from Spotify. It's analogous to forging a check to get the bank to pay you money which you aren't owed.
What does this even mean? Only crimes against things are "regulated" should be prosecuted? Or "public interest", however vaguely that's defined?
>Juicing some streaming numbers hurt who? Spotify's margin?
Other artists. The subscriber/ad revenues are divided pro-rata (unclear whether it's by subscriber or across all subscribers), so by streaming a bunch of fake music, it's displacing the streaming minutes of other artists, ever so slightly.
Moreover, even if it is spotify that's losing money, how is it less in the "public interest" than banks? For the sake of argument let's subtract the threat of violence, and assume they hacked an ATM or something. Would that suddenly not be in the "public interest" to prosecute the offenders? Why should multi-billion dollar banks deserve more sympathy than multi-billion dollar tech companies, especially for crimes that in all likelihood won't lead to either company's demise?
I take it based on your other comments that the distinction between criminal and civil proceedings is suitably apparent to you?
If so I struggle to understand then why this leap is so hard for you.
You and I can have a private dispute without the government getting involved as a prosecuting party, yes? Banks are highly regulated because the state has sought fit to take an interest in how they are run. Roughly, because if a bank defrauds its numerous depositors this incurs a societal cost. Similarly, violence is also regulated, as it is inimical to the state's requisite monopoly on violence to tolerate private expressions of this power.
I simply do not get the intuition here that it is in the public interest to put this person in prison in the same way the intuition may surface in these other cases. If you disagree that is fine, but then I'm curious to hear where your intuition on this private vs public interest line is. Of course it is somewhat vague. If the public interest was clear and obvious to everyone electoral politics would not exist.
Can you offer a positive moral argument for incarceration in this case? Surely you are aware of principles around the burden of proof? Since you seem to be on the pro criminal prosecution side here why don't you take up the burden of saying you want this man to suffer in prison for his crime? I understand your frustration that I don't have all the answers. It would be a more impressive indictment if I was willing to send people to prison under such circumstances.
I take the burden of depriving a fellow citizen of their liberty in a free society rather seriously.
Do you? If so, please explain to me how you alleviate yourself of this burden in this case. I'm open to being persuaded.
If you can't clearly articulate what the "public interest" means, it just feels like this whole thing is just a long winded way for you to say that we shouldn't be prosecuting non-violent crimes, unless the victim is sufficiently sympathetic, in which case we throw the book at them. That's no way to run a justice system.
>Can you offer a positive moral argument for incarceration in this case? Surely you are aware of principles around the burden of proof? Since you seem to be on the pro criminal prosecution side here why don't you take up the burden of saying you want this man to suffer in prison for his crime? I understand your frustration that I don't have all the answers. It would be a more impressive indictment if I was willing to send people to prison under such circumstances.
You can make the same arguments about the questionable utility of incarceration for violent crimes too. The typical arguments against incarceration works equally well for violent crimes as they do for non-violent ones.
To justify imprisonment (rather than purely monetary penalties or civil judgements) you really have to look at the relative scale of harm and the type of harm inflicted. Imprisonment doesn’t always make sense, there are many nonviolent crimes where a purely monetary penalty would be more appropriate. For one thing, imprisonment can prevent people from paying back the victim.
The reason the note works is banks don't want to pay the cost of having their employees getting their brains blown out. Passing a note with this understanding means one knows they are making a threat.
And I don't think you do either. I think one could construct a suitably objective test that would relegate certain instances of this sort of fraud to the civil courts where I think they belong.
Part of the problem is conflating the private Spotify ecosystem with "the system" writ large. In any event, a civil case with appropriate punishment would serve to dissuade others from taking the same action.
What does adding a prison sentence accomplish?
He turned to what, exactly, Donnie?
If so, I think we can save America.
> ... SMITH turned to super intelligence...
Holy shit, we've got ASI?
Where do I go to invest all the money I have in this breakthrough!
It was made up one day and that's what govt publications must call it now.
> Where do I go to invest all the money I have in this breakthrough!
You get it.
The original purpose of the org was also explicitly defensive, with failing to prevent Pearl Harbor being an explicit influence for improving communication and cooperation between arms of the military through a combined leadership.
It's like recursively, fractally stupid.
I hate this timeline.
> ‘Super intelligence’ is the term that President Donald Trump has ordered government employees to use in documents and statements in the place of ‘artificial intelligence’.
Very disappointing.
However, using bots to collect royalties on the songs generated definitely fits within the definition of wire fraud as he was using electronic communications (i.e., the internet), to carry out a scheme to defraud streaming services of money.
If you and I have a contract that I’ll pay you for unique shoppers referred to my store and you just go in yourself to trigger the door counter 10,000 times wearing different disguises, it’s pretty clear that you have defrauded me.
Are any major corporations doing something similar to this, play-botting to get other people's royalty money?
If you ignore the keyword optimizing buzz-catcher press release, thats the crime right there. He used stolen debit card numbers to sign up accounts.
"“Michael Smith exploited super intelligence technology to generate a fraud,” said US Attorney Jamie McDonald. “By flooding music streaming platforms with automated bots in the place of consumers, and fake songs in the place of creativity, Smith robbed millions in royalty payments from genuine artists and their fans."
This state attorney does not seem to be the sharpest tool in the box or I don't get it.
1. I don't see any possible way how he could have stolen from the fans of the artists.
2. If he stole from the artists, then this must be a fixed amount of money in the pot and the slice of the piece of the cake gets smaller, if more people withdraw. There might be such an arrangement between artists and the streaming provider but I don't know details.
No, far from it. A free market doesn’t have regulations, subsidies, tax incentives, bailouts, etc.
You don't even need to be a major corporation to get away with it. You can be an individual if you have the right connections.
I believe what this guy did with the music streaming was wrong. But I also think whatever punishment he gets should be shared by someone who, say, lies about their 500 active user worthless company to unload it for tens of millions of dollars.
But one of these people is going to jail for a year and a half and one is preparing to launch a trillion+ dollar IPO.
Yes, exactly. Traditionally, fraud consists of lying to obtain something you wouldn't have gotten otherwise. This seems sensible, right?
But corpos have figured out how to abuse this - create a long list of business-method-desires in their "terms of service" (aka the legalese diarrhea that nobody reads). The corpos then take the position that merely by using their service as presented, users have take on responsibility for representing that they will abide by the listed whims. When it turns out that users' interests differ from the corpo's whims, and a user does something they majorly don't like, they cry fraud.
In the past, this was limited by the facts that 1. legalese diarrhea wasn't really involved in day to day transactions (we relied on legislative law made by public bodies rather than private law unilaterally promulgated by corpos) and 2. when you bought something, the seller's control over it simply ended. Both of those assumptions have been blown away by pervasive communications, and we really need some reform here.
> SMITH pled guilty to one count of conspiracy to commit wire fraud
the department of justice made a sophisticated music-themed plot around it because the only crime they had was too dumb
It seems that what he is guilty of is to generate some fake users pretending to listen to his songs, is that right? I can see how it is fraud, but how is it different from all the dark patterns used by newspapers to generate more page prints (like auto-refreshing pages)?
He is guilty of creating a bot farm to stream his music, to increase his user count to earn royalties, which is fraud.
1. There is no way he the the only one or first one. Chances are that more than likely he was subscribing to some third party services which were offering this feature.
2. He probably took it too far to get noticed and get in limelight
There are plenty of ways to violate a TOS non-remuneratively or without using deception ("deception" is an element of the crime of fraud and has to be proved up in court; it's not simply what the TOS says it is). Those are civil matters, not crime.
The template you want to be working from: lying for money is fraud.
Eh.
> Is it a crime to publish an AI generated song?
It's not. And a lot of this fraud was done with non-AI songs. But it helps show his attitude.
> It seems that what he is guilty of is to generate some fake users pretending to listen to his songs, is that right? I can see how it is fraud, but how is it different from all the dark patterns used by newspapers to generate more page prints (like auto-refreshing pages)?
Does that get them more money just for showing the ads? Usually the number of page views is up to you. If you find a way to make oodles of money off a mechanism like that, it very well might be criminal fraud!
Our legal system has been turned into a tool to punish the poor and enrich the wealthy.
was it ever othrewise?
So the agencies are forced to pretend every ridiculous thing their king says is a great idea.
He certainly didn’t defraud artists or their fans. This is false framing. He defrauded the streaming platform, which I’m sure the jury would be far less empathetic towards.
I gather these are cards that he opened and funded, not stolen cards. I'm surprised at this scale it wasn't detected much sooner.
These accounts had to be listening a lot in order to generate more royalties than the subscription fees. e.g. Spotify family is $21.99/mo for six accounts. That's $440K annually for 10,000 accounts. Sheesh.
what always fascinates me about crime like this is, if this guy hadn't tried to make 8 million dollars with 10k bot accounts and boosted himself straight to the top, he could have easily made a few thousand per month. How are people clever enough to set this scheme up to begin with but don't consider that you maybe shouldn't try to alert the entire fraud department
I need this guy’s lawyer
> "Michael Smith exploited super intelligence technology to generate a fraud,” said U.S. Attorney Jamie McDonald. “By flooding music streaming platforms with automated bots in the place of consumers, and fake songs in the place of creativity, Smith robbed millions in royalty payments from genuine artists and their fans. This Office is committed to ensuring the integrity of all markets, and protecting the public from those who use super intelligence for fraud."
Wow, uh, he had a time machine?
> Smith’s streaming fraud lasted from 2017 to 2024
People here in HN seem to believe that royalty collecting companies are some sort of charitable organizations for the benefit of the artists. But their conduct and practices range from questionable [1] to outright fraudulent [2]. And now they manage to fly below the radar, because everyone (artists included) is busy bashing Spotify. These companies would sue Spotify out of existence had they offered the option to directly pay the artists instead of going through them.
[1] https://www.reddit.com/r/japan/comments/1302np/jasrac_this_i...
[2] https://torrentfreak.com/huge-scandal-engulfs-greek-anti-pir...
Super intelligence. Aha. :)
This U.S. Attorney is obviously frightened he'll be taken to re-education should he use banned terminology.