2 Pennsylvania Men Plead Guilty to $3.5M Housing Fund Fraud

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Two Pennsylvania men, Anthony Waddell Jefferson and Lester Brown, have pleaded guilty to defrauding a Minnesota public housing fund of $3.5 million. The men created businesses in Minneapolis to purportedly help Medicaid beneficiaries, low-income individuals, and seniors find affordable housing, but instead recruited homeless clients and used ChatGPT to generate fake client notes and emails to support their fraudulent claims.

Why it matters

This case highlights the growing problem of housing-related fraud schemes that target vulnerable populations and government assistance programs. The use of AI technology to create false documentation is a concerning new tactic that authorities will need to monitor and address.

The details

According to the Justice Department, Jefferson and Brown traveled to Minnesota to recruit homeless clients and then used the AI chatbot ChatGPT to create fake client notes and emails to support their fraudulent claims to the Minnesota housing fund. The men claimed they were helping over 230 individuals find affordable housing, when in reality they were pocketing the funds for personal use.

• On February 10, 2026, the Justice Department announced that Jefferson and Brown had pleaded guilty to the fraud scheme.

What’s next

The men are scheduled to be sentenced in the coming months and face up to 20 years in prison for their roles in the fraud scheme.