Key Takeaways:
Four Twin Cities men pleaded guilty to stealing about $2.2 million from Minnesota's Housing Stabilization Services program, a Medicaid benefit for people with disabilities.
When auditors asked for proof, the defendants used ChatGPT to fabricate the supporting records, a tactic the Justice Department calls a growing trend in health care fraud.
Each man faces up to 20 years in prison, and prosecutors tied the case to a separate Minnesota scheme that used the same AI method.
Four Minnesota men pleaded guilty to draining roughly $2.2 million from a state Medicaid program and then using artificial intelligence to hide it, the Justice Department said on July 24.
According to court documents, the men set up Brilliant Minds Services LLC in St. Paul and enrolled it as a provider in Minnesota's Housing Stabilization Services program, a Medicaid benefit meant to help people with disabilities, including seniors and people with mental illness or addiction, find and keep housing. Instead of doing that work, they signed up about 350 people and billed for services that were never provided, or inflated the claims for bigger payouts, from April 2022 through April 2025.
When insurers asked for documentation to back up the claims, the defendants fabricated the records using ChatGPT. The department called the case part of a burgeoning trend of fraudsters using artificial intelligence to carry out health care fraud in Minnesota and across the country.
"These defendants corruptly exploited vulnerable people and a vulnerable program to enrich themselves," said Colin M. McDonald, an assistant attorney general in the Justice Department's National Fraud Enforcement Division.
A growing trend of AI-fabricated records
The Minnesota case is not the only one. In a separate scheme prosecuted in the same state, two Pennsylvania men admitted using the same tactic, generating fake records with AI to cover a housing fraud. The Health Care Fraud Strike Force that brought both cases has charged more than 6,200 defendants tied to over $45 billion in fraudulent billing since 2007.
Each of the four men pleaded guilty to one count of wire fraud in hearings held between July 7 and July 23, and each faces up to 20 years in prison. Sentencing dates have not been set.
The tools built to catch fraud are now being used to commit it. It happened in the same state where the $250 million Feeding Our Future child nutrition scheme reached its 70th conviction this week, and where federal auditors recently found up to $521 billion in yearly federal fraud and no fraud risk plan for programs like SNAP.
People Also Ask
What was Minnesota's Housing Stabilization Services program?
It was a Medicaid benefit meant to help people with disabilities find and keep housing. The state has since ended the program.
How did the men use ChatGPT to commit Medicaid fraud?
When insurers asked them to document their claims, they used ChatGPT to generate fake supporting records to conceal the theft.
How much did the Minnesota Medicaid fraud cost?
About $2.2 million between April 2022 and April 2025, billed for roughly 350 people the men enrolled but never actually helped.
Is AI-assisted health care fraud becoming more common?
The Justice Department says it is a burgeoning trend and has flagged similar AI-fabrication schemes in Minnesota and elsewhere in the country.