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North Carolina Musician Faces Federal Charges for Streaming Fraud

In a striking case of deception, prosecutors allege that Rob Smith, a 52-year-old musician from North Carolina, orchestrated a scheme that defrauded major streaming platforms such as Spotify and Apple Music out of millions of dollars. According to a federal indictment reviewed by Business Insider, Smith misled these platforms into paying royalties for songs that were, in reality, not genuinely enjoyed by listeners.

The Department of Justice announced Smith’s arrest and the charges against him, which include wire fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering.

Details from the indictment reveal that Smith allegedly generated over $10 million from his fraudulent activities, marking this as a significant step in prosecuting such crimes in the digital music landscape.

Smith reportedly uploaded hundreds of thousands of songs, which were streamed billions of times through fake profiles he created with accomplices. Prosecutors highlighted that the streams were distributed across various tracks to avoid detection and potential red flags related to abnormal listening patterns. Smith had reportedly advised his co-conspirators via email about the need to produce a large volume of songs quickly to navigate the platforms’ anti-fraud measures.

The indictment further notes that Smith collaborated with a music promoter and the leader of an AI music company to generate the content. This AI music company was instrumental, supplying Smith with thousands of songs each month while taking a share of the revenue. An email cited in the indictment amusingly distinguishes the nature of the music produced, referring to it as “instant music.”

In an effort to elude scrutiny, Smith’s tracks were assigned randomly generated names and artist identities, often resulting in unusual titles. Examples include names such as “Zygophyceae” and “Zygotic Washstands,” which were unlikely to raise suspicion.

Suspicion was first cast on Smith by a distribution company as early as 2018. Despite these allegations, he vehemently denied any wrongdoing, asserting in an email that there was “absolutely no fraud going on whatsoever.”

If convicted, Smith faces up to 60 years in prison. The Department of Justice has indicated that he will soon appear before a judge, though the specific date for this hearing has not yet been disclosed.

This case serves as a reminder of the vulnerabilities present in the digital music industry and raises questions about the effectiveness of current measures designed to prevent similar fraud in the future.

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