Pennsylvania Duo Charged in $3.5 Million AI-Powered Fraud Targeting Minnesota Homeless Shelters

Anthony Waddell Jefferson and Lester Brown pleaded guilty to wire fraud for exploiting a program meant to help vulnerable residents.

Published on Feb. 11, 2026

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Two Philadelphia men, Anthony Waddell Jefferson and Lester Brown, admitted in federal court that they orchestrated an elaborate scheme to drain millions of dollars from a Minnesota program designed to help the homeless. The pair, operating under the moniker 'The Housing Guys,' used artificial intelligence to generate fake client notes and email chains to cover their tracks while pocketing taxpayer funds meant for vulnerable residents.

Why it matters

This case marks the first time artificial intelligence has been documented as a tool to further health care fraud in Minnesota, raising concerns about the potential misuse of emerging technologies to bypass government oversight and exploit programs meant to support the most vulnerable members of society.

The details

Between February 2022 and June 2025, Jefferson and Brown billed the government for services they never actually provided to approximately 230 people. When insurance companies and auditors began to flag the suspicious activity, the defendants turned to ChatGPT to generate fake documentation to maintain the ruse. The investigation revealed that the scheme resulted in the theft of roughly $3.5 million, diverting critical resources away from those in desperate need of stable housing.

  • On February 11, 2026, Jefferson and Brown pleaded guilty to wire fraud in federal court.
  • The fraud scheme operated between February 2022 and June 2025.

The players

Anthony Waddell Jefferson

A 37-year-old Philadelphia man who pleaded guilty to wire fraud for his role in the $3.5 million fraud scheme targeting Minnesota's Housing Stabilization Services program.

Lester Brown

A 53-year-old Philadelphia man who pleaded guilty to wire fraud for his role in the $3.5 million fraud scheme targeting Minnesota's Housing Stabilization Services program.

IRS Criminal Investigation Chief Guy Ficco

The IRS Criminal Investigation Chief who stated that the defendants tried to hide their fraud behind artificial intelligence, but that technology does not replace accountability.

FBI Director Kash Patel

The FBI Director who stated that the use of artificial intelligence to carry out these crimes is dangerous and will not be tolerated.

Attorney General Pam Bondi

The Attorney General who noted that these convictions are part of a broader crackdown on government program fraud, stating that criminal fraud not only robs taxpayers but also shatters trust in our institutions.

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What they’re saying

“Anthony Jefferson and Lester Brown tried to hide fraud behind artificial intelligence, but technology doesn't replace math — or accountability. Our special agents followed the money, broke down the data, and exposed a scheme that siphoned public assistance dollars from a program meant to support vulnerable Minnesotans.”

— IRS Criminal Investigation Chief Guy Ficco (tampafp.com)

“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.”

— FBI Director Kash Patel (tampafp.com)

“Criminal fraud not only robs taxpayers — it shatters trust in our institutions.”

— Attorney General Pam Bondi (tampafp.com)

What’s next

The judge in the case will determine the final sentences for Jefferson and Brown following a review of the U.S. Sentencing Guidelines.

The takeaway

This case highlights the growing threat of using emerging technologies like artificial intelligence to perpetrate fraud and exploit government assistance programs, underscoring the need for increased vigilance and stronger safeguards to protect vulnerable populations and maintain public trust in critical social services.