>isn’t the United States a free market? What crime did he actually commit? Using services exactly as they are offered?

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.

Generating the AI music wasn't illegal. Using bots to inflate /listens/ of an AI-generated song probably is against a platform's TOS, but isn't inherently illegal.

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.

I don’t think the issue is the fact that the songs were AI generated as much as it is he faked tens of thousands of customers (presumably in free tiers) streaming the songs that he owned in order to collect royalties. That does indeed sound like garden variety fraud to me.

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.

I'm reminded of the words of "Smokey" Yunick who said "I never cheated a day in my life. I just read the rules better than the people who wrote them."

That is what I see with this case. Aside from the debit card thing I am not certain any laws were broken. If making "bots and socks" to manipulate for profit is illegal there is a lot more areas that I would love to see them gone from.

The crime is fraud, and if he was using the service as offered he wouldn't have thousands of accounts pretending to be different people.

Are any major corporations doing something similar to this, play-botting to get other people's royalty money?

NAL. My guess is it's debit card fraud plus everything else.

If the debit card fraud wasn't present, and it was instead a group of individuals doing this, I'm not sure if it would end up in criminal court. It could still end up in civil court.

> he used fake email accounts and fraudulently-obtained debit cards to create the Bot Accounts

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.

Likely a ToS violation. But is this enough for a crime?

"“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.

> isn’t the United States a free market

No, far from it. A free market doesn’t have regulations, subsidies, tax incentives, bailouts, etc.

> What crime did he actually commit?

Fraud

This is a common mistake technical people make when discussing legal topics: they look for technical compliance. I can see why. You try and prove that code works. You think about invariants, preconditions and postconditions.

The law doesn't work that way. So much of the law comes down to holistic and subjective tests. It looks at the totality of the evidence. Those tests typically also contain questions that are also tests.

Let me give you an example: the FBI gets access to a site hosting CSAM and, in doing so, they get IP logs. Many of those logs point to US IP addresses. From this they make arrests and prosecutions.

The typical engineer defense is "you can't prove that use of my IP was me", like you could've been hacked. While that's technically true, the law doesn't work on absolute certainty. Investigators and prosecutors will do things like figure out if you were home at the time, if there's any corroborating evidence on any of your devices and so on.

So back to streaming, you look at the totality of the accused's actions. Did he get mass copies of copyrighted music? As BS as IP is (IMHO), stealing it is still a crime. Using services within their ToS isn't a defense. And the fact that you committed a crime probably means you violated the ToS anyway. Dig in there and you'll probably find stuff about not doing things that aren't illegal.

Fraud: lying in the inducement or fulfilment of a contract.

If lying to induce or fulfil a contract were not a crime, someone could sell you a car telling you it has 0km, but it's actually 300km. Or they could sell you a hamburger telling you its made of meat, and it's actually made of soy. Etc..

Selling a song with 100M listens is a lie if you faked those 100M listens, it's not very different from stealing (but it is different)

> What crime did he actually commit?

Fraud. https://xkcd.com/1494/

Fraud isn't a new concept.

> if you take advantage of the system as it was designed and gain a financial edge, you become a criminal—but if a major corporation does it, they just get a slap on the wrist.

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.

from the article, the crime was that he thought about using a payment system to transfer misrepresented income

> 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 turns out that now, if you take advantage of the system as it was designed and gain a financial edge, you become a criminal

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.

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Using bots to defraud the platforms and get royalties he didn’t actually earn sounds like a crime to me, but what do I know. Maybe I should just make a Trump joke.