Two plead guilty to defrauding Minnesota taxpayers using unusual method

Two Pennsylvania men pleaded guilty Tuesday to using artificial intelligence (AI) to defraud Minnesota’s Housing Stabilization Services program, the Department of Justice (DOJ) announced in a press release.

Anthony Waddell Jefferson, 37, and Lester Brown, 53, flew between Philadelphia and Minneapolis several times and created fraudulent documentation using AI when questioned by insurance companies, according to the release.

According to a December 2025 press release, the men established LLCs in the state and became service providers for the program. The release states the men submitted $3.5 million in fraudulent claims for “services purportedly provided to about 230 beneficiaries.”

This case is the first involving the use of AI to aid a fraud scheme against Minnesota’s health care programs, according to the release.

Attorney General Pam Bondi said via the release that criminal fraud “not only robs taxpayers — it shatters trust in our institutions.”

“Under President Trump’s leadership, yesterday’s convictions are just the beginning. Our prosecutors will work tirelessly to unravel criminal fraud schemes and charge their perpetrators in Minnesota and across the country,” she continued.

Deputy Attorney General Todd Blanche said, “Minnesota will no longer be a haven for fraud under our watch,” via the press release.

“The Justice Department has been investigating billions in taxpayer fraud across the country and has already successfully convicted 66 individuals and counting in Minnesota,” Blanche continued. “The collaboration between the Criminal Division and the U.S. Attorney’s Office is a prime example of how we restore justice and public trust, while holding criminal fraudsters accountable.”

Minnesota became the epicenter of fraud investigation especially following independent journalist Nick Shirley’s investigation into Somali-run child care centers in Minneapolis — which spurred the Trump administration’s creation of a “National Fraud Enforcement” division. In late 2025, news broke of a massive COVID relief fraud scheme in the state, in which over 90% of those charged were of Somali descent.

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