North Dakota Bank Fraud Charges Dropped Against Tennessee Woman

Authorities acknowledge AI error led to mistaken arrest and jailing of Carter County resident Angela Lipps.

Mar. 31, 2026 at 12:19am

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An extreme close-up photograph of a bank security camera lens, reflecting a harsh flash of light, conceptually illustrating the dangers of faulty AI-powered surveillance systems.An AI-powered surveillance system's flawed identification led to the wrongful jailing of an innocent Tennessee woman, exposing the risks of over-reliance on facial recognition technology.Fargo Today

A Carter County, Tennessee woman named Angela Lipps was jailed for two months in Fargo, North Dakota after an artificial intelligence system mistakenly flagged her as a suspect in a bank fraud case. Lipps, who had never been to North Dakota, was eventually exonerated after her attorney was able to provide evidence that she had been in Tennessee at the time of the alleged crimes.

Why it matters

This case highlights the potential dangers of over-reliance on AI-powered facial recognition and identification tools by law enforcement, which can lead to wrongful arrests and detentions of innocent people. It also raises questions about the need for more rigorous investigative procedures to verify AI-generated leads before taking action.

The details

In July 2025, Angela Lipps was arrested in Tennessee on a probation violation. Police then discovered she also had an outstanding warrant in North Dakota for bank fraud. Lipps was extradited to Fargo, where she was held for two months facing multiple fraud charges. Her attorney, Jay Greenwood, was able to quickly prove Lipps' innocence by obtaining her bank records showing she had never been to North Dakota. The Fargo Police Department acknowledged the mistake was due to an AI facial recognition system that incorrectly identified Lipps as the suspect, and they have now implemented new policies to better verify AI-generated leads.

  • On July 14, 2025, Angela Lipps was arrested in Tennessee on a probation violation.
  • On October 30, 2025, Lipps was extradited from Tennessee to Fargo, North Dakota.
  • In Fargo, Lipps was held in custody for two months while facing four counts of unauthorized use of personal identifying information and four counts of theft.
  • Shortly before a scheduled preliminary hearing, the case against Lipps was dropped after her attorney provided evidence of her alibi.
  • On March 23, 2026, the Fargo Police Department held a press conference acknowledging the mistake made by their AI facial recognition system.

The players

Angela Lipps

A Carter County, Tennessee woman who was mistakenly jailed in Fargo, North Dakota for two months on bank fraud charges due to an error by an AI facial recognition system.

Jay Greenwood

The criminal defense attorney who represented Angela Lipps and was able to quickly prove her innocence by obtaining her bank records showing she had never been to North Dakota.

David Zibolski

The Fargo Police Department Chief who acknowledged the mistake made by the department's AI facial recognition system and announced new policies to better verify AI-generated leads.

West Fargo Police Department

The department whose AI facial recognition system incorrectly identified Angela Lipps as a suspect, leading to her wrongful arrest and detention.

Fargo Police Department

The department that arrested and jailed Angela Lipps based on the faulty AI identification from the West Fargo Police Department, without properly investigating the case first.

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What they’re saying

“Through their AI system, made that identification of Ms. Lipps and forwarded that information. I would say it's not an identification; it's a potential suspect, but they forwarded that information to our detectives, who then assumed wrongly that they had also sent in the surveillance photos with that photo ID.”

— David Zibolski, Fargo Police Department Chief

“All I did was ask her family if she had ever left Tennessee, and they were pretty clear that she hadn't, and then provided me information within about a week. So it's kind of split both ways. I get when people are going to use the tools that they have, you know, AI tools that they can use. But it can't be the only tool. And they just left it at that. And this is what happens.”

— Jay Greenwood, Angela Lipps' criminal defense attorney

What’s next

The Fargo Police Department has issued a temporary directive restricting the use of facial recognition technology to only the criminal investigation division, and the department's overall use of the technology is now under review.

The takeaway

This case highlights the need for law enforcement to exercise caution and implement robust verification procedures when using AI-powered tools like facial recognition, to prevent wrongful arrests and detentions of innocent people. Overreliance on these technologies without proper human oversight can have serious consequences.