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Plea Bargains

Can a Judge Sentence Below Guidelines After a Guilty Plea? A Fraud Case Where 46 Months Became 18

Prosecutors asked for at least 46 months. The judge imposed 18. A Manhattan federal fraud sentencing shows that a guilty plea settles guilt, not the sentence, and how mitigation shapes the final number.

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Empty wood-paneled courtroom benches receding toward a raised judge's bench, lit by a shaft of afternoon window light.

Can a judge sentence below guidelines after a guilty plea, even when the prosecutor asks for more? In a Manhattan federal courtroom on October 6, 2026, the answer was yes. Michael Smith, a North Carolina man who pleaded guilty in March 2026 to one count of conspiracy to commit wire fraud, faced a guideline range of 46 to 57 months. Prosecutors asked for at least 46. U.S. District Judge John G. Koeltl imposed 18 months, according to Music Business Worldwide.

If you have taken a plea, or someone you love is weighing one, that gap is the lesson. A guilty plea settles whether you are convicted. It does not settle how long you serve. The number comes later, at a hearing where the judge hears from the prosecution, the probation office and the defense, and then makes an independent decision.

What was the case about?

As reported, from 2017 to 2024 Smith used thousands of bot accounts to stream songs he owned, most of them AI-generated, and collected royalties on those streams. The total ran to more than $8 million. Digital Music News reported one example: in April 2023, his bots streamed his music 80.9 million times through YouTube Music family plans, compared with 9.3 million family-plan streams that month for Taylor Swift's entire catalogue. The same outlet reports Smith is the first person federally sentenced for music-streaming fraud in the United States.

The facts matter less here than the procedure. This was a white collar plea in the Southern District of New York, and the sentencing followed the same steps any federal fraud defendant will go through.

Who sets the numbers at a federal sentencing?

Several different numbers were in front of Judge Koeltl, and each came from a different place. According to Music Business Worldwide and LawCommentary:

  • Guideline range: 46 to 57 months. The probation office calculates this in the presentence report, and the judge makes the final calculation.

  • Government's request: at least 46 months. This came in the prosecution's sentencing memo, asking for the bottom of the range.

  • Probation's recommendation: 24 months. The probation office made its own recommendation, already well below the range.

  • Defense request: probation, with no prison time. This came in the defense sentencing memo.

  • Sentence imposed: 18 months. That is below the guideline range, below the government's ask and below probation's recommendation.

Music Ally separately reported the 18-month sentence, the 46-month request and the defense's request for probation.

Is a judge bound by the prosecutor's sentencing recommendation?

Usually, no. It depends on the kind of plea agreement. Federal Rule of Criminal Procedure 11 describes two common types, and the difference decides how much certainty you get.

Two overlapping closed folders and a pen on a dark wood desk under a single lamp, suggesting competing sentencing recommendations.

Under Rule 11(c)(1)(B), the government agrees to "recommend, or agree not to oppose the defendant's request, that a particular sentence or sentencing range is appropriate." That recommendation is not binding. Rule 11(c)(3)(B) says that for this type of agreement, "the court must advise the defendant that the defendant has no right to withdraw the plea if the court does not follow the recommendation or request." In plain terms: the judge can go higher or lower than what the prosecutor recommends, and you cannot take your plea back because of it.

Rule 11(c)(1)(C) works differently. There, the parties "agree that a specific sentence or sentencing range is the appropriate disposition of the case." That type of agreement is built around a specific outcome rather than a recommendation.

The practical point: the prosecutor's number at sentencing is one input. It is not the answer.

What does a judge have to consider before going below the guidelines?

The judge has to calculate the guidelines and take them seriously, but the guidelines are not the last word. Rule 11(b)(1)(M) requires the court to tell a defendant who is pleading guilty about "the court's obligation to calculate the applicable sentencing-guideline range and to consider that range, possible departures under the Sentencing Guidelines, and other sentencing factors."

Those other factors come from 18 U.S.C. 3553(a), which says "The court shall impose a sentence sufficient, but not greater than necessary" to serve the purposes of sentencing. The factors include:

  • "the nature and circumstances of the offense and the history and characteristics of the defendant" (3553(a)(1))

  • the need "to afford adequate deterrence" (3553(a)(2)(B))

  • "the need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct" (3553(a)(6))

Those factors are where a defense lawyer builds the case for a lower sentence. They are also where prosecutors build the case for a higher one.

What goes into a mitigation argument?

Smith's defense presented mitigation in three broad groups. Each is a model of what a sentencing memo can contain.

A folded blank letter, a worn guitar pick on a leather strap, and a plain wedding band on a dark wood table under soft lamp light.

Arguments about the offense

According to LawCommentary's account of the sentencing memos, his lawyers argued that "he initially believed his conduct was lawful and sought advice from an experienced music lawyer." They did not hide the harder facts. They acknowledged he "later lied to distributors and used increasingly deceptive tactics."

The defense also argued the loss was spread so thin that no one person was meaningfully harmed. RTS.FM reported their description of any single creator's loss as "a drop in an ocean." Music Business Worldwide quoted the defense as saying "no recording artist or songwriter suffered any appreciable loss," and warning that the case should not be used "as a vehicle to attempt to solve the ills of an industry."

Arguments about the person

The defense stressed that Smith had no prior convictions and wrote that "while he made serious mistakes here, those mistakes do not define him as a person," according to RTS.FM. In court, as reported by Inner City Press, the defense pointed out:

  • "He spent two years on pre-trial release."

  • "His wife's dance studio, attendance is down by 30%."

  • "He has a job offer from a music studio in Nashville."

Compliance on release, family impact and a job waiting on the outside are standard pieces of a "history and characteristics" argument under 3553(a)(1). They are also things a defendant can actively build while a case is pending.

Arguments about fairness and disparity

The defense also compared the case to another recent prosecution. Per Inner City Press, counsel told the court: "In the recent NFT case of Chastain, Judge Furman recognized it was a frontier case, gave only three months of home confinement." That is a 3553(a)(6) argument: similar conduct should get similar treatment.

What did the judge say he weighed?

The quotes below come from Inner City Press's live courtroom coverage and its fuller follow-up. They are a reporter's account, not an official transcript.

  • On the guidelines: "I'm not sure how much that argument gets you. It is common ground among many judges that the financial guidelines can tend to overstate the seriousness of the crime."

  • On the plea: "There is no enhancement here for vulnerable victim. But this defendant did plead guilty."

  • On the technology: "It was not the use of AI which was targeted here."

  • On the sentence: "The offense is non-violent and not drug related...I will sentence to 18 months in prison."

Two points stand out for anyone facing a federal fraud charge. First, the judge openly questioned how far at least one argument went, while still saying that loss-driven financial guidelines can overstate how serious a crime is. Second, the guilty plea itself was part of what the judge weighed. Pleading did not fix the number, but it was on the scale.

How did prosecutors push back?

Mitigation does not go unanswered. According to LawCommentary, the government argued that "the length and scale of the fraud justify a prison term at the bottom of the federal guideline range" and that "incarceration is necessary both to punish Smith and deter others." Prosecutors pointed to Smith's statements and efforts to conceal the activity as evidence he knew it was fraud, which cuts against the "believed it was lawful" argument. On the diffuse-loss theory, they responded that spread-out losses did not change the fact that the money flowed to Smith.

Music Business Worldwide quoted the prosecution: "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."

The judge landed between the two sides. He rejected the request for no prison time, and he went well below the government's floor. That is how contested sentencing usually works: some defense arguments land, some don't, and the judge decides which carry weight.

What does a guilty plea not avoid?

A below-guidelines sentence is still a sentence. Smith received 18 months in prison, two years of supervised release and forfeiture of $8,091,843.64, according to Music Business Worldwide. Inner City Press reported that the court heard "We are not seeking restitution" and that no restitution was ordered. The money order was forfeiture.

For a reader, that means planning for the full picture: custody time, supervision afterward, and financial consequences that can be very large in fraud cases.

How often do federal judges sentence below the guidelines in fraud cases?

Often, but not most of the time. The U.S. Sentencing Commission's FY2025 Quick Facts show that 4,804 of 66,662 federal cases involved theft, property destruction and fraud. Of those:

  • 41% were sentenced within the guideline range.

  • 40% received downward variances, with an average reduction of 56%.

  • 14% received substantial-assistance departures, with an average reduction of 69%.

Smith's sentence fits the downward-variance pattern. But the data cuts both ways: a within-range sentence was slightly more common than a variance. A below-range outcome is a realistic goal to work toward, not something to count on.

What to ask your lawyer before you plead

  • What type of plea agreement is this? Ask whether it is a Rule 11(c)(1)(B) recommendation, which the judge can ignore without letting you withdraw, or a Rule 11(c)(1)(C) agreement built around a specific sentence or range.

  • What is the guideline calculation, and what drives it? In fraud cases, loss amount can push the range up fast. Ask which parts of the calculation can be challenged.

  • What will go in our sentencing memo? Criminal history, employment, family impact, compliance on pretrial release and any comparable cases all belong in the conversation.

  • What can I do now? Following every release condition, keeping or finding work and documenting your family's situation are things you control before sentencing day.

  • What else comes with the sentence? Ask about supervised release, forfeiture and restitution, not just prison time.

Sources

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Frequently asked questions

Can a judge sentence below the guidelines after a guilty plea?

Yes. Federal judges must calculate and consider the guideline range, but they also weigh the 18 U.S.C. 3553(a) factors and must impose a sentence 'sufficient, but not greater than necessary.' In one October 2026 Manhattan fraud case, the range was 46 to 57 months and the judge imposed 18.

Is a judge bound by the prosecutor's sentencing recommendation?

Not under a Rule 11(c)(1)(B) plea agreement, where the government only recommends a sentence. The court must warn the defendant there is no right to withdraw the plea if the judge does not follow the recommendation.

What is the difference between a (B) and a (C) plea agreement?

A Rule 11(c)(1)(B) agreement is a recommendation the judge can disregard. A Rule 11(c)(1)(C) agreement is one where the parties agree that a specific sentence or sentencing range is the appropriate disposition of the case.

How often do federal fraud defendants get a sentence below the guidelines?

In FY2025, U.S. Sentencing Commission data show 40% of federal theft, property destruction and fraud sentences were downward variances, with an average reduction of 56%. Another 41% were within the guideline range.

What can help get a lower sentence at federal sentencing?

Mitigation under 3553(a) often includes lack of criminal history, compliance on pretrial release, family impact, employment prospects and comparisons to similar cases. Prosecutors can challenge each argument, and the judge decides how much weight each one gets.

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Gavel Daily is an AI-operated publication. Articles may summarize statutes, court filings, or public reporting, but readers should verify time-sensitive legal details with primary sources or a licensed attorney.

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