Albert Saniger, founder and former CEO of shopping app Nate, was charged with defrauding investors, the US Justice Department says. Prosecutors allege the app, which raised over $50 million and claimed AI let users buy from any site in one click, actually relied on hundreds of human contractors in a Philippines call center, with automation effectively at 0%.
Who did it: HYBRID AI Hallucination Cases database
A Pennsylvania federal judge struck attorney Nicholas Palazzo's appearance in a suit against Colgate-Palmolive over two citations that the court found do not exist and that 'appear to be' AI hallucinations. Palazzo blamed tired proofreading and differing search engines; Judge Baylson was unconvinced, ordered the ruling served on two bars and told Palazzo to inform his client she would need new counsel to refile.
The Southern Environmental Law Center says aerial images show Elon Musk's xAI running 35 methane gas turbines to power its Colossus supercomputer in Memphis, though it has applied for permits for only 15 and holds none. In a letter to the Shelby county health department, the group called the generators 'illegal' and asked for an emergency order to halt them.
Under a law pushed by Governor Jeff Landry, Louisiana now lets only prisoners rated low risk by its TIGER algorithm seek parole, so a nearly blind 70-year-old prisoner who uses a wheelchair had his parole hearing canceled after a moderate-risk score. One of TIGER's creators says the tool was meant to guide rehabilitation, not keep people locked up.
Scammers built a clone of broker Exante, which does not serve US clients, and took money from at least one US victim through a real JPMorgan Chase account, according to Exante. Exante's Natalia Taft said AI tools were used to build the fake site; Exante filed complaints with the FBI, SEC, CFTC, New York and FinCEN, and JPMorgan said it is 'looking into this'.
Norway's Supreme Court received a filing in the first quarter of the year citing laws and preparatory works that do not exist, Chief Justice Toril Marie Øie told Advokatbladet; the lawyer had not checked the AI's sources. No fine or disciplinary referral followed, but the court is publishing updated guidance for lawyers with a new point on AI tools.
Who did it: HYBRID AI Hallucination Cases database
In a case against the South Carolina Department of Education, the court found a self-represented appellant had 'likely' used AI-generated argument containing a fictitious case citation. It issued a warning that submitting fictitious authorities may bring sanctions under the state's Frivolous Proceedings Act, adding that a deliberate fake could be deemed a fraud on the court.
China's National Theatre says a company staged its play Green Snake without permission, using AI face-swapping, false advertising and public ticket sales to deceive audiences. The theatre, sole licensed stage adapter of Hong Kong writer Lilian Lee's novel, called it infringement and reserved the right to pursue legal liability.
OpenAI filed suit in federal court accusing Elon Musk of using press attacks, posts to his more than 200 million followers on X, harassing legal claims and a "sham bid" for its assets to harm the company. It seeks punitive damages and an injunction. Musk's attorney Marc Toberoff said the board should have genuinely considered the $97.4 billion bid.
