Under Texas law, using armies of automated bot accounts to trick streaming platforms into paying royalties is treated first as a computer crime under Penal Code Section 33.02, breach of computer security, and only then as theft, because the fraud runs through unauthorized access to the platforms' computer systems. Federal prosecutors in Manhattan say North Carolina musician Michael Smith, 54, of Cornelius, did exactly that on a massive scale: he allegedly uploaded hundreds of thousands of AI-generated songs and used more than a thousand bot accounts, routed through VPNs to dodge anti-fraud systems, to stream those tracks billions of times and siphon off royalties meant for real artists. Smith pleaded guilty on March 19, 2026 to conspiracy to commit wire fraud, agreed to forfeit more than $8 million, and was scheduled for sentencing on July 29, 2026 in the Southern District of New York. Because the conduct spanned platforms used nationwide, the case is a useful lens on how a Frisco or Collin County court would analyze the same scheme under Texas law. The description reflects the government's allegations and Smith's admissions in his plea.
What Was the AI Streaming Fraud Scheme?
It was a bot-driven scheme to fake streams and collect royalties. According to the Southern District of New York, Smith bought hundreds of thousands of songs created with artificial intelligence, uploaded them to services including Spotify, Apple Music, Amazon Music, and YouTube Music, and then used more than 1,000 automated "bot accounts" to stream the tracks billions of times. Prosecutors said he deliberately spread the streams across a huge catalog of songs so no single track looked suspicious, and used VPNs to make the bots appear to be real listeners in different locations. The fake activity diverted royalties away from legitimate musicians and songwriters, generating more than $10 million over roughly 2017 to 2024. Smith pleaded guilty to conspiracy to commit wire fraud, which carries up to five years in federal prison, and agreed to forfeit $8,091,843.64.
Is Using Bots to Access a Platform a Crime in Texas?
Yes. Texas Penal Code Section 33.02, breach of computer security, makes it an offense to knowingly access a computer, computer network, or computer system without the effective consent of the owner. Streaming services grant access under terms of service that prohibit automated or bot traffic, so using software and fake accounts to stream around anti-fraud controls can be framed as access that exceeds or lacks effective consent. The offense is graded by the harm and the amount involved: it ranges from a Class B misdemeanor for a bare unauthorized access up to a first-degree felony when the aggregate loss is $300,000 or more. A related provision, Section 33.03, addresses defeating or defrauding a computer-security system. In a scheme that allegedly moved millions of dollars through manipulated platform computers, the computer-crime charge can be as serious as any theft count.
How Does Texas Treat the Stolen Royalties?
The diverted royalties are analyzed as theft under Penal Code Section 31.03, specifically theft by deception. Theft occurs when a person unlawfully appropriates property, including money, with intent to deprive the owner, and deception includes creating a false impression of fact. Fabricating billions of streams to make platforms believe real people were listening fits that definition, with the "owners" being the artists and rights holders whose royalty pool was drained. Texas grades theft by dollar value, and at more than $10 million the conduct sits at the top of the ladder as a first-degree felony. Because the fake streams accumulated over years, Section 31.09 lets prosecutors aggregate the amounts obtained under one continuing scheme into a single high-value charge rather than many small ones, which is what pushes a stream-by-stream fraud into felony territory.
Does It Matter That the Songs Were AI-Generated?
Not to the core criminal analysis. Whether the tracks were written by a person or generated by software, the crime is the deception of the platforms and the theft of royalties, not the nature of the music. Uploading AI songs is not itself illegal, and neither is using AI tools; the alleged offense is manufacturing fake listeners to trigger payments. That said, the AI element can matter at the margins, because generating an enormous catalog cheaply is what made billions of automated streams look plausible and hard to detect. Under Texas law the focus stays on intent and consent: did the user knowingly access the platforms' systems without effective consent and obtain money by creating a false impression? The technology used to scale the scheme is evidence of planning, not a separate defense.
How Would a Texas Court Handle a Case Like This?
A Collin County court would likely see parallel charges: a computer-crime count under Section 33.02 for the unauthorized, bot-driven access, and a first-degree theft count under Section 31.03 aggregated under Section 31.09 for the royalties obtained. Prosecutors would rely on the volume of bot accounts, the VPN use, and internal messages describing the plan to prove that access was knowing and without consent and that the deception was intentional. The defense would probe whether "effective consent" was truly absent, whether the loss figure is provable to the dollar, and whether the client was a knowing participant or a lower-level actor in a larger conspiracy. Sentencing would weigh the aggregated loss, the sophistication and duration of the scheme, and any leadership role, and Texas alternatives such as deferred adjudication are difficult to obtain for a long-running, high-dollar, technologically sophisticated fraud.
How L&L Law Group Can Help
Computer-fraud and high-value theft allegations combine two of the most serious charge categories in Texas, and the aggregated loss amount can drive the case into first-degree felony territory with decades of exposure. L & L Law Group, PLLC helps clients in Frisco and across the Dallas-Fort Worth area understand whether a Section 33.02 computer-security charge and a Section 31.03 theft charge truly fit their facts, challenge how "effective consent" and the loss amount are proven, and pursue the leading available resolution. If you or a family member is under investigation or has been charged with computer crimes, wire fraud, or theft in Collin, Denton, or Dallas County, contact L & L Law Group, PLLC at (972) 370-5060 to discuss your options.
Frequently asked questions
Is using bots to stream music a crime in Texas? It can be. Penal Code Section 33.02, breach of computer security, makes it an offense to knowingly access a computer system without the owner's effective consent, and streaming platforms prohibit automated traffic. When the scheme collects money, prosecutors can add a theft charge under Section 31.03.
How is the dollar amount of a streaming-fraud case calculated? Texas grades theft by value, and Section 31.09 allows amounts obtained under one continuing scheme to be aggregated into a single charge. A multi-year scheme collecting millions in royalties can therefore be charged as a first-degree felony rather than many small offenses.
Is it illegal to upload AI-generated songs? No. Uploading AI-generated music and using AI tools are not crimes by themselves. The alleged offense in this type of case is creating fake listeners with bot accounts to deceive platforms and divert royalties, which implicates computer-crime and theft statutes, not the use of AI.
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