New York charges allege AI cloning of executives in $129m fraud

Federal prosecutors in New York have charged three foreign nationals over an alleged scheme that used artificial intelligence to impersonate corporate executives and lawyers, saying it took more than $129m from companies in the United States and elsewhere. The indictment, unsealed on Thursday according to the Jerusalem Post and CBS News, puts AI-driven voice and image cloning at the centre of a commercial crime case rather than a policy or research dispute, and the officials announcing it presented the allegations as evidence that the technology can be turned to criminal use. US attorney Jamie McDonald said artificial intelligence offered great potential but that the public should recognise that some may seek to use it for criminal goals; James C Barnacle Jr, the FBI's assistant director in charge, said the bureau would keep adapting its capabilities as criminals "continue to weaponize emerging technologies", the Guardian reported.

According to the US attorney's office for the Southern District of New York, as relayed by NBC News, the conspirators approached employees — typically in accounting departments — posing as the chief executive and asking for help with a confidential financial transaction, using AI to mimic the executive's voice and sometimes image on calls. Employees were then directed to lawyers at large international law firms said to be handling the deal; those lawyers were also impersonated. NBC News and CBS News report that Jacob Soall posed mainly as British attorneys and worked from a script titled "Lawyer Call". Money was wired to accounts in countries including Spain, Portugal, the United Arab Emirates, Singapore, Austria, Slovakia and China, the Jerusalem Post reported, and then converted into cryptocurrency to conceal its source and ownership. The Jerusalem Post put the largest identified loss at $11,578,474 to a UK financial technology company, with $5,242,747 from a Florida pet food company, $4,829,580 from a Missouri hospital system and $2,968,497 from a California hospital system. The Guardian additionally reported about $2.7m from a Rhode Island bank and over $4.6m from a Massachusetts mutual fund company; Mediaset gave the latter figure as $4,639,918. NBC News listed a New York investment bank among the victims without giving an amount.

The Jerusalem Post identified Soall as a dual Spanish-British national, Hazan as an Israeli national and Sheetrit as holding Israeli and Emirati citizenship; CBS News gave their ages as 41, 54 and 42 respectively. NBC News and CBS News reported that, according to prosecutors, Hazan handled much of the laundering, and the Jerusalem Post reported that he allegedly boasted of having laundered more than $400m and of being "number one all over the world" among professional money launderers. CBS News reported that Hazan was convicted in a New York court of conspiracy to commit bank fraud in 2008, a conviction NBC News placed in the Southern District of New York. The Guardian reported the aliases "Seba Clarke" and "Rocky Balboa" for Soall and "Superman Cash", "Fat Boy" and "Ron" for Hazan.

The Jerusalem Post and NBC News set out seven counts: conspiracy to commit wire fraud, wire fraud, money-laundering conspiracy, two counts of money laundering and two counts of aggravated identity theft; CBS News reported the indictment on wire fraud, money laundering and aggravated identity theft charges without listing each count. The Jerusalem Post reported a maximum of 20 years per count on the fraud and money-laundering charges and two years for each identity-theft count, while CBS News rendered the maximum as 20 years except for aggravated identity theft, which carries two years; NBC News, diverging from both, said each of the seven charges carries a maximum of 20 years. Accounts of the arrests also differ: the Jerusalem Post said Soall was arrested in Spain on 17 July and Hazan and Sheetrit on 7 September, the latter in the United Kingdom; NBC News reported arrests in Spain in June and August and in the UK in September; CBS News said the three were arrested between June and September; and the Guardian said Soall and Hazan were arrested in Spain over the summer. Extradition requests are pending for all three, and CBS News reported that lawyers for Soall and Sheetrit did not immediately respond to a request for comment and that it was not clear whether Hazan had an attorney.