January 1, AI Scheme Hits Minnesota Taxpayers for Millions

Wyatt’s Take

• Two men from Philadelphia used AI to steal $3.5 million from a Minnesota housing aid program.
• They faked documents and used ChatGPT to trick authorities and pocket money for services never delivered.
• The case marks the first time AI has been used in Minnesota to pull off this kind of healthcare fraud.

Two Philadelphia men have admitted to scamming Minnesota’s Housing Stabilization Services program out of $3.5 million. They set up fake businesses, enrolled as service providers, and pretended to help people with disabilities find homes, but no real help was ever given.

The fraudsters used artificial intelligence to produce fake records when authorities and insurance companies asked for proof. As the scheme unfolded, they traveled to Minneapolis to carry out their plan and repeatedly recruited vulnerable people from shelters just to bill the system for phantom services.

“Criminal fraud not only robs taxpayers — it shatters trust in our institutions. Under President Trump’s leadership, yesterday’s convictions are just the beginning,” said Attorney General Pamela Bondi.

The government says this is the first time AI has been used for healthcare fraud charges in the state. Investigators found the men billed for aiding more than 200 Minnesotans, but it was all smoke and mirrors fueled by technology.

When pressed for paperwork, the men used ChatGPT to whip up fake client notes and e-mails. Authorities say they stole millions meant to help those struggling with addiction, homelessness, and mental illness.

“Defrauding those who rely on government programs takes away critical resources, and the use of artificial intelligence to carry out these crimes is dangerous and will not be tolerated,” said FBI Director Kash Patel.

Both men pleaded guilty to wire fraud, a charge that could send them to prison for up to 20 years. Sentencing will come later after the court looks at guidelines and other factors.

“Anthony Jefferson and Lester Brown tried to hide fraud behind artificial intelligence, but technology doesn’t replace math — or accountability,” said IRS Criminal Investigation Chief Guy Ficco.

Wyatt Matters

Folks work hard and pay taxes so the truly needy can get help—not so big city scammers can line their pockets with fake paperwork and fancy tech. When crooks target these programs, it takes food off our tables and weakens the trust that holds this country together.

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