"The Bands and the Fans Were Fake. The $10 Million Was Real"

[Thethirdapple]

31 minutes ago, ElmerJFudd said:

Interesting - it’s debatable if the AI company that generated the songs owns the songs.  They aren’t new, they are made from copyrighted works.  That’s a different impending court case.  
 

He built a mechanism to siphon money from several businesses by pretending to be many people that don’t exist - both creators and consumers. They’ll approach it the same as banks do when people use false accounts, false identities, or manipulate account records.   It’s fraud.  
 
 

I definitely agree that all the streaming platforms need to do more to protect against fraud.  It hurts the business and all stakeholders.  
 

 

 

Not fake music not fake accounts, its the system the services build in hopes that only they can exploit us, but when we find a “loophole” to exploit the system: we are criminals!

 

No musician was harmed with this awesome exploit! If these companies CHOOSE to pass along the “cost” to the rest of us thats not the fault of the individual working the system. Thats the corps choice to profit off of everything at all costs!!!

 

Let them eat cake!

 

carry on…

 

 

 

PEACE

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[J.F.N.]

1 hour ago, Thethirdapple said:

Not fake music not fake accounts, its the system the services build in hopes that only they can exploit us, but when we find a “loophole” to exploit the system: we are criminals!

 

No musician was harmed with this awesome exploit! If these companies CHOOSE to pass along the “cost” to the rest of us thats not the fault of the individual working the system. Thats the corps choice to profit off of everything at all costs!!!

 

Let them eat cake!

 

carry on…

 

 

 

PEACE

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It will be very interesting to follow the process and its juridical claims in this procedure, can't wait!

[ElmerJFudd]

2 hours ago, J.F.N. said:

 

Everything I write is the same, my musical capacity is trained on copyrighted material too, I would say it's the same for probably 99% of us...

The difference is that your human mind was trained on hearing music but you generated new recordings (either by playing and recording instruments yourself or using samples).   If you chose to use samples you acquired the rights to use them in a commercial recording - if you didn't, the rights holders are able to take legal action.  With AI we are all waiting to see what the courts decide regarding the fact that it uses the actual recordings of rights holders without permission or compensation.  It's conceptually very similar to sampling so I expect it will be treated the same way.    At the same time, we have already seen many court cases around theft of musical ideas and copyright even when making entirely new recordings - where the newer song creator has had to share song credits and proceeds with the rights holder that inspired him/her.   

 

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Who was frauded? Is it criminal to have lots of streaming accounts? Or is it criminal to listen to the same playlists over again (ooops, I'm in danger then!!).

I understand this perspective and the related opinion being offered in this thread.   I have thought about it and done some reading up, as I am curious as well to see how this plays out.   I believe at this time that the approach the prosecution will take will be similar to those taken by financial institutions.  Fraud (deceit to obtain money), false representation, failure to disclose information.  Possibly wire fraud, funneling money through varied accounts and embezzlement.    Smith had thousands of creator and streamer accounts.  In both instances, to avoid detection, he used false identities to acquire certain pricing tiers and increase streaming capacity to the sum of $10 million dollars. 

 

I agree corporate greed is a problem, that it's funny to hear about someone sticking it to the man.  That these guys get what they deserve because their systems are flawed, etc.  But we don't live off the grid.  We are in the matrix with everyone else and the laws are designed to protect the game makers.  I'm not an expert on the topic of white-collar crime so take what I've offered with a grain of salt.  It's just my best guess.   

 

 

[J.F.N.]

Well, afaik regarding ML for AI music generation there's very much a statistical mathematical model analyzing the patterns of the music the AI ia training on, not the music itself as a piece of music. Which makes me understand it to be just as fluffy as our subconscious and sometimes in popular music creations, very conscious when it comes to using different tricks to "copy" successful music.

 

But this is another conversation out of scope for this thread.

[ElmerJFudd]

28 minutes ago, J.F.N. said:

Well, afaik regarding ML for AI music generation there's very much a statistical mathematical model analyzing the patterns of the music the AI ia training on, not the music itself as a piece of music. Which makes me understand it to be just as fluffy as our subconscious and sometimes in popular music creations, very conscious when it comes to using different tricks to "copy" successful music.

 

But this is another conversation out of scope for this thread.

I believe you are correct, the music it spits out may not be actual pieces of the source digital recordings it was fed (and those companies may very well have a license for the samples they use to generate the new recordings - though I am suspicious on that front as well).  But conceptually you have a digital machine, not a human, extracting patterns, structures, styles and all the elements of music (tempo, pitch, timbre, dynamics, etc.) to create sound-alike digital music, and it does it at a rate and volume unmatchable by any human, even a team of humans.  
 

The question for the courts to decide (because that’s what we are dependent on in the matrix in which we inhabit) is how are they going to protect human artists and their work from being fed to the AI without compensation? This is a simple money issue. Not the inherent laws of science and nature on this earth, but the ones our society makes up and agrees to live by.  In that respect, it’s the same as the main topic on what crime has been committed?   Who benefited and who was hurt?  The courts will have to decide because that’s all there is in our society.  

[J.F.N.]

3 minutes ago, ElmerJFudd said:

I believe you are correct, the music it spits out may not be actual pieces of the source digital recordings it was fed (and those companies may very well have a license for the samples they use to generate the new recordings - though I am suspicious on that front as well).  But conceptually you have a digital machine, not a human, extracting patterns, structures, styles and all the elements of music (tempo, pitch, timbre, dynamics, etc.) to create sound-alike digital music, and it does it at a rate and volume unmatchable by any human, even a team of humans.  The question for the courts to decide (because that’s what we are dependent on in the matrix in which we inhabit) is how are they going to protect human artists and their work from being fed to the AI without compensation.   This is a simple money issue. Not the inherent laws of science and nature on this earth, but the ones our society makes and agrees to live by.  In that respect, it’s the same as the main topic on what crime has been committed?   Who benefited and who was hurt?  The courts will have to decide because that’s all there is in our society.  

 

And in a couple of years when the fear of the unknown is focused on something else, nobody will talk about this anymore....

 

Once upon a time Jazz was dangerous and detrimental to your soul...

 

[ElmerJFudd]

1 minute ago, J.F.N. said:

 

And in a couple of years when the fear of the unknown is focused on something else, nobody will talk about this anymore....

Yes, because by that time the business models and the rules of the game will have adapted to the change.  Right know there’s a bit of chaos on the playing field.  

[J.F.N.]

3 minutes ago, ElmerJFudd said:

Yes, because by that time the business models and the rules of the game will have adapted to the change.  Right know there’s a bit of chaos on the playing field.  

 

Or the music makers will still be making music because they love what they do, and the streaming platforms will be even more full of shit from opportunistic people trying to earn a buck doing nothing, and real music will find a more serious and sustainable outlet...

[J.F.N.]

31 minutes ago, ElmerJFudd said:

Yes, because by that time the business models and the rules of the game will have adapted to the change.  Right know there’s a bit of chaos on the playing field.  

 

And in 2009 the media conglomerate mafia chose to make The Pirate Bay the scapegoat instead of trying to understand the changes in the market, behaviours, demands, etc 

 

In that very same time period Google was just as efficient as TPB with the benefit that instead of having to fiddle with Torrents, you could just download or stream whatever you where looking for direct with the links from the Google search results...

 

Say no more...

[J.F.N.]

"Smith’s scheme ran from 2017 through 2024, according to the indictment. It diverted funds from musicians and songwriters whose songs were streamed by real consumers by falsely creating the appearance of legitimate streaming, authorities said. In other words, Smith’s fraudulent activities involved misrepresenting information to the streaming platforms, creating false accounts, and disguising the true nature of the streams, using bot accounts rather than human listeners, according to the indictment.

 

Smith used software to continuously stream songs he owned, according to the indictment. He also allegedly paid co-conspirators and people overseas to sign up for bot accounts. Smith used false names to sign up bot accounts and used debit cards in fake names to pay for the accounts, the indictment stated."

 

Read more at: https://www.charlotteobserver.com/news/business/article291928725.html

 

It will be very interesting to see what will be the real juridical conversation here, I bet a good lawyer will question the responsibility of the platforms not being able to police this, and question if this is a crime or just a flaw in the design of their systems. For the falsifications, that's a different story, harder to get away with...

 

 

 

[cedar]

Allow me to offer my own, perhaps unique (for this forum) perspective.

 

In my day job, I am a criminal defense attorney.  Almost all of my work is defending individuals from federal charges. I have represented dozens of people accused of various frauds.

 

So when I first saw this story, I had several visceral reactions.  First, as a defense attorney, I am predisposed to root for the accused and mistrust the prosecutors.  Second, as a part-time musician with many professional musician friends, I completely understand the schadenfreude of watching streaming services lose money by unethical practices.

 

Nevertheless, there is zero question that the conduct being alleged constitutes a real, criminal fraud. .  Federal law prohibits using the internet to commit a scheme to defraud others for the purpose of obtaining money or property.  Through various methods, he pretended to the streaming services that real people were streaming his music, which was not true.  

 

To respond to a handful of comments in this thread, this was not just "upscaling" legitimate uploading/streaming activity.  This was fraud.  Anyone who does this - including companies - can be prosecuted.

 

Further, it does not matter if some of his isolated actions were not - in themselves - criminal.  Fraudulent schemes routinely involved sets of actions that are not criminal.  But when the innocent acts are done with criminal intent to deceive, we have a crime.

 

In addition, I find it very unlikely that this guy is going to have what lawyers call a "FACTUAL" defense.  In other words, if the reports are even remotely true, there is probably a massive paper (and electronic trail) showing that he faked the listeners, and did other things along the way.  So I strongly doubt he'll be able to deny the mechanics of the acts alleged.

 

It may be, on the other hand,  that he has a "LEGAL" defense.  By this, I mean that it is possible that the agreements with the streaming service - if they are poorly worded - are vague in certain ways, enabling the guy to claim that, even though he violated the spirit of the agreements, he did not technically make any misrepresentations.  If I were representing him, I would be desperately searching for some plausible argument along these lines.

 

But barring that kind of technical defense, this guy seems very likely to be convicted and sentenced to years of jail.  And it is standard practice to impose hefty restitution and forfeiture.  Thus, unless the guy actually managed to hide his assets, he will lose all of his profits.

 

Of course, it would be great if this case could somehow lead to a new business model that didn't screw musicians over.  But let's not pretend this guy is a hero.

[ElmerJFudd]

2 hours ago, cedar said:

Allow me to offer my own, perhaps unique (for this forum) perspective.

 

In my day job, I am a criminal defense attorney.  Almost all of my work is defending individuals from federal charges. I have represented dozens of people accused of various frauds.

 

So when I first saw this story, I had several visceral reactions.  First, as a defense attorney, I am predisposed to root for the accused and mistrust the prosecutors.  Second, as a part-time musician with many professional musician friends, I completely understand the schadenfreude of watching streaming services lose money by unethical practices.

 

Nevertheless, there is zero question that the conduct being alleged constitutes a real, criminal fraud. .  Federal law prohibits using the internet to commit a scheme to defraud others for the purpose of obtaining money or property.  Through various methods, he pretended to the streaming services that real people were streaming his music, which was not true.  

 

To respond to a handful of comments in this thread, this was not just "upscaling" legitimate uploading/streaming activity.  This was fraud.  Anyone who does this - including companies - can be prosecuted.

 

Further, it does not matter if some of his isolated actions were not - in themselves - criminal.  Fraudulent schemes routinely involved sets of actions that are not criminal.  But when the innocent acts are done with criminal intent to deceive, we have a crime.

 

In addition, I find it very unlikely that this guy is going to have what lawyers call a "FACTUAL" defense.  In other words, if the reports are even remotely true, there is probably a massive paper (and electronic trail) showing that he faked the listeners, and did other things along the way.  So I strongly doubt he'll be able to deny the mechanics of the acts alleged.

 

It may be, on the other hand,  that he has a "LEGAL" defense.  By this, I mean that it is possible that the agreements with the streaming service - if they are poorly worded - are vague in certain ways, enabling the guy to claim that, even though he violated the spirit of the agreements, he did not technically make any misrepresentations.  If I were representing him, I would be desperately searching for some plausible argument along these lines.

 

But barring that kind of technical defense, this guy seems very likely to be convicted and sentenced to years of jail.  And it is standard practice to impose hefty restitution and forfeiture.  Thus, unless the guy actually managed to hide his assets, he will lose all of his profits.

 

Of course, it would be great if this case could somehow lead to a new business model that didn't screw musicians over.  But let's not pretend this guy is a hero.

That’s what I suspected.  Falsified identities, falsified contracts, agreements and other documents with financial institutions… there are crimes there on a singular level, then they realize he’s done it thousands of times and it’s part of a grander scheme where he conspired to have others participate.  

[MathOfInsects]

2 hours ago, cedar said:

Nevertheless, there is zero question that the conduct being alleged constitutes a real, criminal fraud...Through various methods, he pretended to the streaming services that real people were streaming his music, which was not true.

I don't follow this distinction. It was a real person--him. I've never had to prove I'm a person to stream a song, and have uploaded lots of songs where the only assertion I had to make was that there were no other copyright claimants. 

I also don't see how he took money intended for anyone else. Streaming pays you, it doesn't compare you to others and slice up a set pie proportionately.

Stories like this hit people in their "AI spot," but IMO he out-crooked the crooks and I'm here for it. I hope he skates. 

[ElmerJFudd]

55 minutes ago, MathOfInsects said:

I don't follow this distinction. It was a real person--him. I've never had to prove I'm a person to stream a song, and have uploaded lots of songs where the only assertion I had to make was that there were no other copyright claimants. 

I also don't see how he took money intended for anyone else. Streaming pays you, it doesn't compare you to others and slice up a set pie proportionately.

Stories like this hit people in their "AI spot," but IMO he out-crooked the crooks and I'm here for it. I hope he skates. 

He created thousands of accounts using false identities for payment and for receiving payment as part of a much broader scheme. At least that’s what it sounds like to me. I also suspect he did not declare these earnings or pay taxes on them.  
 

I am not rooting for the streaming companies here, I’m just contemplating what the prosecution’s approach will be.  

[Thethirdapple]

7 hours ago, ElmerJFudd said:

But we don't live off the grid.  We are in the matrix with everyone else and the laws are designed to protect the game makers.  I'm not an expert on the topic of white-collar crime so take what I've offered with a grain of salt.  It's just my best guess.   

True that

 

Hot takes can be fun, and there is more information available every day…

 

But not really a mystery as to what the “courts” will do.

 

 

 

 

 

PEACE

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[Thethirdapple]

5 hours ago, J.F.N. said:

And in 2009 the media conglomerate mafia chose to make The Pirate Bay the scapegoat instead of trying to understand the changes in the market, behaviours, demands, etc 

Funny cause this also happened in 2009, but we’ve known it for a long long time…

 

 

 

 

PEACE

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[Thethirdapple]

4 hours ago, cedar said:

Of course, it would be great if this case could somehow lead to a new business model that didn't screw musicians over.  But let's not pretend this guy is a hero.

Agreed, “he” is no hero, a “fraudster” defrauding “fraudsters”… yup

 

Each count carries how any years?
Back in the day he might have been hired or rewarded for finding bugs in the system.

 

But yeah he is going to jail and corporations will continue to profit from badly implemented services with no real accountability or responsibility to perform due diligence when they can just sue the pants off anyone who finds a loophole.

 

Why are corporations rewarded and protected by creating fake companies but citizens are jailed?

 

 

PEACE

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[ElmerJFudd]

I hear the company supplying Smith with songs was Boomy AI. 
 

https://boomy.com/

 

https://www.billboard.com/pro/ai-music-streaming-fraud-case-boomy-ceo-listed-co-writer-songs/

 

“Smith is charged with three counts of wire fraud, wire fraud conspiracy and money laundering conspiracy, the unnamed CEO is not charged with any crime in this case” 

[ProfD]

Regsrdless of how he did it, even if from a jail cell, I wouldn't be surprised if Smith becomes a paid consultant to record companies trying to sell their legit artists across streaming platforms.😎

[MathOfInsects]

5 hours ago, ElmerJFudd said:

He created thousands of accounts using false identities for payment and for receiving payment as part of a much broader scheme. At least that’s what it sounds like to me. I also suspect he did not declare these earnings or pay taxes on them.  
 

I am not rooting for the streaming companies here, I’m just contemplating what the prosecution’s approach will be.  

I understand. But I have never had to assert anything about myself to stream or submit music. I mean, I have to give a name, and there is (for example) a difference between the actual name of the responsible party and any name you might be creating music under. But it's up to me tell them my actual name. I could make a second "actual name" tomorrow and as long as I had a place for that money to go. If I chose to register a song under my kids' names, and let them have the royalties, would that be fraud?

 

It would be different if he juiced the algorithm somehow to get people to stream something they didn't want to, or if he paid people to playlist him. But all the streams were him. I just don't see the fraud.

 

I understand that it pissed the streaming companies off and isn't what they intended, but I'm very unclear on what the actual crime would be. Finding a loophole they hadn't guarded against yet? More power to him...

[CyberGene]

I’m amazed at some of the comments. Whether you like streaming or not, that’s apparently a generational thing, but it’s here to stay and is how music is distributed nowadays. It’s ultimately a good thing: it makes it possible for the world to listen to your music. If you can’t make a living from it, or from music for that matter, then blame it on the inherent changes in society/culture needs nowadays, not on how people listen to music. With all that in mind, I don’t see how a fraudster is anything but a fraudster. 

[Thethirdapple]

Heres’ an oblique perspective:

The guy must have paid income tax on all that revenue. So ACTUALLY he helped his local and national community by contributing way more to the general coffer than any corp does!!!

 

what was that childhood story that took place in sherwood forest???

 

Is the I.R.S. going to give back the tax revenue to Spoty? Essentially ripping it out MY hands to return it to a for profit corporation who doesnt give a damn about musicians! Nor pays its share…

 

Quote

For example, if you're single and earn $1 million in taxable income, you'll fall into the highest tax bracket, which is currently 37%. This means that you'll pay 37% in federal income taxes on the portion of your income that exceeds the threshold for the highest tax bracket

How much of the “streaming” metrics were skewed by this “fraudster” which Spoty used to enhance the platforms performance to investors and advertisers, make the platform more attractive and lucrative based on a scheme the platform knew it could “shut down” anytime it wanted.

 

 

Elsewhere in this web we weave: courts be courting

 

Quote

 

“While Spotify’s handling of composer copyrights appears to have been seriously flawed, any right to recover damages based on those flaws belongs to those innocent rights holders who were genuinely harmed,” she said. “Not ones who, like Eight Mile Style, had every opportunity to set things right and simply chose not to do so for no apparent reason, other than that being the victim of infringement pays better than being an ordinary licensor.

Ok for Spoty to be a “victim of infringement” but not ok for the actual victim to seek accountability…

 

DOUBLE STANDARDS anyone?

 

yes, more please

 

 

 

 

PEACE

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[ElmerJFudd]

1 hour ago, Thethirdapple said:

Heres’ an oblique perspective:

The guy must have paid income tax on all that revenue. So ACTUALLY he helped his local and national community by contributing way more to the general coffer than any corp does!!!

Because he was using false identities to receive money it is unlikely he declared any of it on his income tax.   Remember he was trying to evade detection and had up-scaled his scheme to multiple parties internationally.  

[Thethirdapple]

11 minutes ago, ElmerJFudd said:

Because he was using false identities to receive money it is unlikely he declared any of it on his income tax.   Remember he was trying to evade detection and had up-scaled his scheme to multiple parties internationally.  

Doh…

 

But the same stupid(oblique) logic applies whether he paid taxes or just bought stuff as a consumer we are “supporting” local business… sooo claw that back!

NOT SAYING thats what he actually did but just an idea of the “good for me not for thee” which corporations are rewarded by doing.

 

My ex is a tax attorney for multinational banks, her career is made from created financial products which banks use to move money around and avoid taxes and penalties… JUST SAYN’ : in her university days at Bolt law, she and a friend realized that they could sell and resell to each other a used stereo system and claim a tax right off each time they bought and sold it to each other, over and over endlessly, due to the depreciation of the item each time its sold…

 

 

 

PEACE

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[ElmerJFudd]

Bank fraud, wire fraud etc. is a crime in our society that’s long established.  Robin Hood steals from the rich to give to the poor.  Stealing was a crime in his society even if from the perspective of the poor his actions had justification or moral vagueness.  
 

I think we all know how this is going to play out even if we  cheer the fellow for beating the gatekeepers at their own game for at least a time. To our knowledge he wasn’t donating the money to charities, just enriching himself and possibly co-conspirators. 

[Thethirdapple]

True, Pirates hate to be looted…

 

stealing from those who have stolen from us is the ultimate ouroboros spiraling effect which the “system” profits from.

 

Expect that often it is perfectly LEGAL to exploit loopholes, just not for citizens

 

 

 

PEACE

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[CyberGene]

4 minutes ago, Thethirdapple said:

stealing from those who have stolen from us

Care to elaborate?

[Thethirdapple]

26 minutes ago, CyberGene said:

Care to elaborate?

 

 

 

How much of the “streaming” metrics were skewed by this “fraudster” which Spoty used to enhance the platforms performance to investors and advertisers, make the platform more attractive and lucrative based on a scheme the platform knew it could “shut down” anytime it wanted.

 

 

 

 

PEACE

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[ElmerJFudd]

1 minute ago, Thethirdapple said:

True, Pirates hate to be looted…

 

stealing from those who have stolen from us is the ultimate ouroboros spiraling effect which the “system” profits from.

 

 

 

 

 

PEACE

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That’s it really.  We live in a system, a system of our own species design, that is unjust in many ways.  Over-valuing one type of work over another while ignoring its importance to society as a whole.  Making it possible to acquire, hold, multiply and pass on more money  than can ever be needed by any family while others go without generation to generation. Prosecuting tax evaders while the rich evade taxation.  Etc. etc. 

 

Our systems are flawed but we made them and live in them.  

[J.F.N.]