Generative AI and White-Collar Crime

Two Philadelphia men, Anthony Waddell Jefferson and Lester Brown, have pleaded guilty in federal court to wire fraud for a scheme that sought roughly $3.57 million from Minnesota’s Medicaid Housing Stabilization Services (HSS) program, which is meant to help people with disabilities and addiction find and keep housing. Prosecutors say that after a friend tipped them in early 2022 that Minnesota’s programs were 'a good opportunity to make money,' they registered Chozen Runner and Retsel Real Estate in Minnesota, commuted back and forth from Philadelphia, and marketed themselves in Minneapolis shelters and Section 8 buildings as 'The Housing Guys' while submitting wildly inflated and often fictitious bills. Court filings describe Jefferson using ChatGPT to help draft fabricated documentation and both men inventing service records, cross‑referring each other’s clients, and hiring relatives as staff while they operated from downtown office space. The case is one of a growing number of federal prosecutions targeting Minnesota‑administered federal programs in the wake of the $250 million Feeding Our Future scandal, where a senior prosecutor has suggested total fraud across programs could top $9 billion. Sentencing dates have not yet been set, but the pleas reinforce concerns that Minnesota’s generous safety‑net programs and weak oversight are drawing 'fraud tourists' from other states at federal taxpayers’ expense.