SEC · 29 September 2026
- Who
- Cryptoaiml Ltd. and Cryptoaiml Capital Foundation
- The AI claim
- Posed as investment professionals in WhatsApp groups and offered supposedly AI-generated trading signals that would produce large profits.
- Alleged
- The SEC says no trading took place, the reported profits were made up, and more than $12.5 million was misappropriated between August 2024 and March 2025.
- Money at issue
- More than $12.5M misappropriated
- Outcome
- Pending in federal court in Manhattan.
Why it is marked adjacent: AI is the lure; the SEC describes the AI signals as supposed.
Sources: SEC press release 2026-95, 29 Sep 2026.
SEC · 29 September 2026
- Who
- TSAI Pro Ltd. and TSAI Capital Foundation
- The AI claim
- Rented investors “AI trading bots” that would trade on their behalf, with guaranteed profits.
- Alleged
- The SEC says there were no AI trading bots, deposits were never invested, and at least $2.8 million was taken from about 1,715 retail investors.
- Money at issue
- At least $2.8M from about 1,715 investors
- Outcome
- Pending in federal court in Manhattan; the complaint was filed on 29 September 2026.
Sources: SEC press release 2026-95, 29 Sep 2026; SEC complaint.
Cox Media Group “Active Listening”
SettledFTC · 21 May 2026
- Who
- CMG Media Corporation (Cox Media Group), MindSift LLC and 1010 Digital Works LLC
- The AI claim
- Marketed an AI-powered “Active Listening” ad service said to detect relevant conversations picked up by smart devices, so ads could be targeted locally.
- Alleged
- The FTC said the service did not listen to conversations or use voice data and did not place ads accurately. MindSift and 1010 Digital Works allegedly supplied the sales materials.
- Outcome
- Final orders approved in August 2026, by a 2 to 0 vote: $880,000 from CMG and $25,000 each from MindSift and 1010 Digital Works, $930,000 in all for customer refunds.
Sources: FTC press release, 21 May 2026; FTC final orders release, 27 Aug 2026.
AI Wealth and Morocoin
PendingSEC · 22 December 2025
- Who
- Three purported crypto platforms (Morocoin Tech, Berge Blockchain, Cirkor) and four “investment clubs”, including AI Wealth Inc.
- The AI claim
- Investment clubs on WhatsApp promoted supposedly AI-generated investment tips before steering people to fake crypto trading platforms.
- Alleged
- The SEC says the scheme took at least $14 million from US retail investors between January 2024 and January 2025. No trading happened, and people who tried to withdraw were asked for more fees.
- Money at issue
- At least $14M from US investors
- Outcome
- Pending in federal court in Colorado. The SEC seeks injunctions, penalties and disgorgement.
Why it is marked adjacent: AI is the lure here, not a product, and the SEC release says little about the AI claims beyond “supposedly AI-generated” tips.
Sources: SEC press release 2025-144; SEC litigation release 26453.
FTC · 25 August 2025
- Who
- Air AI Technologies and related companies; owners Caleb Maddix, Ryan O’Donnell and Thomas Lancer
- The AI claim
- Advertised its conversational AI as able to replace human customer service staff, with promises that buyers would quickly earn back large sums and refund guarantees.
- Alleged
- The FTC said the earnings, performance and refund claims were false; some buyers lost as much as $250,000.
- Money at issue
- Up to $250,000 lost per buyer
- Outcome
- In March 2026 the FTC announced a proposed settlement banning the defendants from selling business opportunities, with an $18 million judgment mostly suspended and $50,000 to be paid. We have not confirmed the court entered it.
Sources: FTC press release, 25 Aug 2025; FTC press release, 24 Mar 2026.
Tadrus Capital (Mina Tadrus)
Guilty plea or sentenceJustice Dept. · 18 August 2025
- Who
- Mina Tadrus, founder of Tadrus Capital LLC
- The AI claim
- Marketed Tadrus Capital as a hedge fund run on AI high-frequency trading models that could guarantee returns of up to 30% a year.
- Alleged
- Prosecutors said there was no AI trading and that less than 1% of investors’ money went into real investments.
- Money at issue
- More than $5.7M from at least 31 investors (DOJ)
- Outcome
- Pleaded guilty to investment adviser fraud in February 2025 and was sentenced in August 2025 to 30 months in prison and $4,224,850 in restitution.
Sources: DOJ (E.D.N.Y.) release, 18 Aug 2025; DOJ (E.D.N.Y.) charging release.
FTC · 28 April 2025
- Who
- Workado, LLC (formerly Content at Scale AI)
- The AI claim
- Advertised its AI Content Detector as 98% accurate at telling AI-written text from human writing.
- Alleged
- The FTC said independent testing found 53% accuracy on general content, and that the model had been trained only on academic writing.
- Outcome
- Final order approved in August 2025. No money; Workado must have reliable evidence for accuracy claims, email eligible customers and file compliance reports.
Sources: FTC press release, 28 Apr 2025; FTC final order release, 28 Aug 2025.
PGI Global (Ramil Palafox)
Guilty plea or sentenceSEC and Justice Dept. · 22 April 2025
- Who
- Ramil Ventura Palafox, founder of PGI Global (Praetorian Group International)
- The AI claim
- Promoted his crypto expertise and what the SEC calls “a supposed AI-powered auto-trading platform”.
- Alleged
- The SEC says he raised about $198 million from investors worldwide and misappropriated more than $57 million, spending some on luxury cars and goods.
- Money at issue
- About $198M raised; more than $57M misappropriated
- Outcome
- The SEC’s civil case is in federal court in Virginia. In the parallel criminal case, Palafox pleaded guilty to wire fraud and money laundering in September 2025 and was sentenced in February 2026 to 20 years in prison. IRS Criminal Investigation puts investor losses at no less than $62.7 million.
Why it is marked adjacent: The AI platform was one part of a wider crypto and forex fraud, and the SEC release does not say how it was meant to work.
Sources: SEC press release 2025-69, 22 Apr 2025; IRS Criminal Investigation release, 12 Feb 2026; The Block, 18 Sep 2025.
Nate (Albert Saniger)
PendingJustice Dept. and SEC · 9 April 2025
- Who
- Albert Saniger, founder and former CEO of Nate, Inc.
- The AI claim
- Told investors Nate’s shopping app used AI to complete online purchases on its own. The SEC says he claimed an automation rate above 90%.
- Alleged
- Prosecutors and the SEC say the app’s real automation rate was effectively zero. Hundreds of contract workers, mostly in the Philippines, completed the purchases by hand.
- Money at issue
- More than $40M raised (DOJ); over $42M (SEC)
- Outcome
- Charged in Manhattan with securities fraud and wire fraud, each carrying up to 20 years. The SEC filed a parallel civil case the same day. We found no resolution of either case; the charges are allegations.
Sources: DOJ (S.D.N.Y.) release, 9 Apr 2025; SEC litigation release 26282, 11 Apr 2025; SEC complaint.
YouPlus (Shaukat Shamim)
Guilty plea or sentenceJustice Dept. · 8 April 2025
- Who
- Shaukat Shamim, founder of YouPlus
- The AI claim
- Told investors YouPlus had fully working AI, including a video search engine that used neural networks to predict marketing results.
- Alleged
- Prosecutors said there was no working AI: staff in India watched the videos and wrote up slides by hand. Shamim also inflated revenue, claiming $4.6 million for 2018 when the real figure was under $100,000.
- Money at issue
- About $6.4M obtained through the false statements
- Outcome
- Pleaded guilty to securities fraud and was sentenced in April 2025 to 30 months in prison, a $50,000 fine and three years of supervised release.
Note: First charged in July 2020, before “AI washing” was a common term. Dated here by the 2025 sentence.
Sources: DOJ (N.D. Cal.) release, 8 Apr 2025; DOJ (N.D. Cal.) charging release, Jul 2020.
Click Profit
Settled, proposedFTC · 18 March 2025
- Who
- Click Profit, LLC, its operators and affiliated companies
- The AI claim
- Promised passive income from a system “powered by artificial intelligence” for selling on Amazon, Walmart and TikTok, plus partnerships with brands such as Nike and Disney.
- Alleged
- The FTC said the AI, earnings and brand claims were false and that consumers lost at least $14 million.
- Money at issue
- At least $14M lost by consumers
- Outcome
- A court temporarily halted the scheme in March 2025. In August 2025 the FTC announced proposed settlements with a lifetime industry ban and judgments of $13.6 million and $7.3 million, both partly suspended. We have not confirmed the court entered them.
Sources: FTC press release, 18 Mar 2025; FTC press release, 25 Aug 2025.
SEC · 14 January 2025
- Who
- Presto Automation Inc.
- The AI claim
- Said its AI drive-thru ordering product, Presto Voice, removed the need for human order-taking.
- Alleged
- The SEC found the claim was false, and that Presto did not disclose that its early units ran on a third party’s speech-recognition technology.
- Outcome
- Settled with a cease-and-desist order. No civil penalty, citing the company’s cooperation, remedial steps and financial condition.
Sources: SEC administrative proceeding 33-11352, 14 Jan 2025; SEC order.
FTC · 3 January 2025
- Who
- accessiBe Inc. and accessiBe Ltd.
- The AI claim
- Said its AI-powered accessWidget could make any website comply with the Web Content Accessibility Guidelines (WCAG).
- Alleged
- The FTC said the claim was false or unsupported, and that accessiBe presented articles and reviews it was connected to as independent opinion.
- Outcome
- Final order approved in April 2025, by a 3 to 0 vote: a $1 million payment, a bar on unsupported accessibility claims and rules on disclosing paid endorsements.
Sources: FTC press release, 3 Jan 2025; FTC final order release, 22 Apr 2025.
FTC · 3 December 2024
- Who
- IntelliVision Technologies Corp.
- The AI claim
- Said its AI facial recognition was among the most accurate on the market, was trained on millions of faces and was free of gender and racial bias.
- Alleged
- The FTC said it had no evidence for its accuracy, bias and anti-spoofing claims, and had trained on images of about 100,000 people, not millions.
- Outcome
- Final order issued in January 2025 bars the unsupported claims. No money was ordered; breaking the order can cost up to $51,744 per violation.
Sources: FTC press release, 3 Dec 2024; FTC case page.
Evolv Technologies
SettledFTC · 26 November 2024
- Who
- Evolv Technologies Holdings, Inc.
- The AI claim
- Marketed its AI-powered Evolv Express scanners as detecting all weapons while ignoring harmless items, and as more accurate, faster and cheaper than metal detectors.
- Alleged
- The FTC said the claims were deceptive: in schools the scanners missed some weapons, including a seven-inch knife in October 2022, while flagging laptops and water bottles.
- Outcome
- Settled with an agreed order that the federal court in Massachusetts entered on 5 December 2024. It bars Evolv from misrepresenting weapons detection, accuracy, false alarms, speed, labor costs and testing, and lets some school customers cancel contracts. No money was ordered.
Sources: FTC press release, 26 Nov 2024; Court order entered 5 Dec 2024 (D. Mass.).
Destiny Robotics
Settled, proposedSEC · 15 October 2024
- Who
- Destiny Robotics Corp. and founder Megi Kavtaradze
- The AI claim
- Said it was building the world’s first humanoid AI robot home assistant, to be delivered by 2023.
- Alleged
- The SEC said the company raised about $141,000 with a robot far less advanced than described that could not realistically ship by 2023, and that it misstated the founder’s background and hid his link to the lead investor.
- Money at issue
- About $141,000 raised
- Outcome
- Both agreed, without admitting or denying the allegations, to permanent injunctions. The founder offered to pay a $50,000 penalty plus $14,385 in disgorgement and interest, subject to court approval.
Sources: SEC litigation release 26157, 15 Oct 2024.
SEC · 10 October 2024
- Who
- Rimar Capital USA, Inc.; Rimar Capital, LLC; Itai Liptz; Clifford Boro
- The AI claim
- Said it had an AI platform that would trade securities automatically for clients.
- Alleged
- The SEC found the AI trading claims were false and misleading, along with claims about assets under management and returns, while the firm raised about $4 million from 45 investors. It also found CEO Itai Liptz misused company money.
- Money at issue
- About $4M from 45 investors
- Outcome
- Settled without admitting or denying the findings: $310,000 in civil penalties ($250,000 for Liptz, $60,000 for Boro), plus $213,611 in disgorgement and interest from Liptz, who was also barred from the industry with a right to reapply after five years.
Sources: SEC press release 2024-167, 10 Oct 2024.
Ascend Ecom
Settled, proposedFTC · 25 September 2024 · Operation AI Comply
- Who
- Ascend Ecom and related companies; owners William Michael Basta and Jeremy Kenneth Leung
- The AI claim
- Promised “cutting edge” AI-powered tools that would earn buyers thousands of dollars a month in passive income from online stores.
- Alleged
- The FTC said consumers lost at least $25 million, and that the operators pressured buyers to change or delete negative reviews.
- Money at issue
- At least $25M lost by consumers
- Outcome
- A court halted the scheme and appointed a receiver. In June 2025 the FTC announced a proposed settlement: a lifetime ban on selling business opportunities and a $25 million judgment, partly suspended because the owners cannot pay. We have not confirmed the court entered it.
Sources: FTC press release, 25 Sep 2024; FTC press release, 23 Jun 2025.
FTC · 25 September 2024 · Operation AI Comply
- Who
- DoNotPay, Inc.
- The AI claim
- Sold its service as an AI “robot lawyer” that could stand in for a human lawyer.
- Alleged
- The FTC said DoNotPay never tested whether its AI performed like a human lawyer and did not hire attorneys to check its accuracy.
- Outcome
- Final order approved in January 2025: $193,000 in monetary relief, notices to 2021 to 2023 subscribers, and a ban on claiming it works like a real lawyer without evidence.
Sources: FTC press release, 25 Sep 2024; FTC final order release, 11 Feb 2025.
Ecommerce Empire Builders
SettledFTC · 25 September 2024 · Operation AI Comply
- Who
- Empire Holdings Group LLC and Peter Prusinowski
- The AI claim
- Offered to help people build an “AI-powered Ecommerce Empire” through training courses or done-for-you online stores costing tens of thousands of dollars.
- Alleged
- The FTC said its claims of $10,000-a-month earnings had no basis and that refunds were refused or only partly paid.
- Outcome
- Court order entered in May 2025: a lifetime ban on selling business opportunities and a $9,786,124 judgment, partly suspended because the defendants cannot pay it all.
Sources: FTC press release, 25 Sep 2024; FTC release, 9 May 2025.
FBA Machine
Settled, proposedFTC · 25 September 2024 · Operation AI Comply
- Who
- FBA Machine (formerly Passive Scaling) and owner Bratislav Rozenfeld
- The AI claim
- Promised guaranteed income from online stores run with AI-powered software.
- Alleged
- The FTC said the “risk-free” income and refund promises were false and that consumers lost more than $15.9 million.
- Money at issue
- More than $15.9M lost by consumers
- Outcome
- A court halted the scheme and appointed a receiver. In July 2025 the FTC announced a proposed settlement: a lifetime ban on selling business opportunities and a $15.7 million judgment, partly suspended. We have not confirmed the court entered it.
Sources: FTC press release, 25 Sep 2024; FTC press release, 30 Jul 2025.
FTC · 25 September 2024 · Operation AI Comply
- Who
- Rytr LLC
- The AI claim
- Sold an AI writing assistant with a feature for generating customer reviews and testimonials.
- Alleged
- The FTC said the feature produced detailed reviews unrelated to what the user typed, which would almost certainly be false if posted, giving users the means to flood the market with fake reviews.
- Outcome
- A final order in December 2024, approved 3 to 2, barred Rytr from offering review-writing services. In December 2025 the FTC reopened the case and set the order aside, saying it unduly burdened innovation in AI.
Why it is marked adjacent: Not a false claim about Rytr’s own AI. It is here because the FTC announced it as part of Operation AI Comply, and its reversal marks the agency’s change of course.
Sources: FTC final order release, 18 Dec 2024; FTC release setting the order aside, 22 Dec 2025.
Pieces Technologies
SettledState AG · 18 September 2024
- Who
- Pieces Technologies, Inc.
- The AI claim
- Described its generative AI, which summarized patient records for hospital staff, as “highly accurate”, with a “severe hallucination rate” of fewer than 1 in 100,000.
- Alleged
- The Texas Attorney General said the accuracy figures were likely inaccurate and may have misled hospitals about the products’ accuracy and safety. At least four large Texas hospitals were feeding it patient data in real time.
- Outcome
- Settled with the Texas Attorney General: Pieces must disclose accurately how accurate its products are and make sure hospital staff understand how far to rely on them. The release states no payment and no admission.
Sources: Texas Attorney General release, 18 Sep 2024.
Kubient (Paul Roberts)
Guilty plea or sentenceSEC and Justice Dept. · 16 September 2024
- Who
- Paul Roberts (former CEO and chair), Joshua Weiss (former CFO) and Grainne Coen (former audit committee chair) of Kubient, Inc.
- The AI claim
- Kubient told investors its KAI artificial-intelligence tool had been tested with two customers and caught about 300% more ad fraud than their existing tools.
- Alleged
- The SEC says no such test took place and that Roberts fabricated KAI fraud reports to support $1.3 million of revenue booked before the IPO. Weiss and Coen are accused of failing to correct the statements.
- Money at issue
- $1.3M of revenue backed by fabricated reports
- Outcome
- Roberts pleaded guilty to securities fraud the day the charges were announced. MLex and The Register reported in March 2025 that he was sentenced to a year and a day in prison. The SEC’s civil cases were filed in Manhattan; Roberts agreed to injunctions but is contesting the other remedies.
Sources: SEC litigation release 26107, 16 Sep 2024; SEC complaint; DOJ (S.D.N.Y.) release, 16 Sep 2024; The Register, 21 Mar 2025; MLex, 20 Mar 2025.
Joonko (Ilit Raz)
Guilty plea or sentenceSEC and Justice Dept. · 11 June 2024
- Who
- Ilit Raz, founder and former CEO of Joonko Diversity, Inc.
- The AI claim
- Joonko was marketed as an AI hiring platform that helped employers find and hire diverse candidates.
- Alleged
- The SEC says Raz lied to investors about Joonko’s customers, candidate numbers and revenue, and gave them forged bank statements and fake contracts.
- Money at issue
- At least $21M (SEC); about $27M raised in 2021 and 2022 (DOJ)
- Outcome
- Raz pleaded guilty to securities fraud in a parallel criminal case in Manhattan; the DOJ release of 11 September 2026 gives no sentencing date. We found no resolution of the SEC’s civil case, which seeks an injunction, penalties, disgorgement and a bar on serving as an officer or director.
Why it is marked adjacent: The AI itself is not alleged to be fake: the alleged lies were about customers and revenue at an AI startup. It is here because the SEC presented it as a case of AI buzzwords dressing up a conventional fraud.
Sources: SEC press release 2024-70, 11 Jun 2024; SEC litigation release 26020; DOJ (S.D.N.Y.) release, 11 Sep 2026.
SEC · 18 March 2024
- Who
- Delphia (USA) Inc.
- The AI claim
- Said it used AI and machine learning on its clients’ data to power its investment advice.
- Alleged
- The SEC found those statements, made in its SEC filings, a press release and on its website, were false and misleading, and that Delphia broke the Marketing Rule.
- Outcome
- Settled without admitting or denying the findings: censure, a cease-and-desist order and a $225,000 civil penalty. Announced the same day as Global Predictions.
Sources: SEC press release 2024-36, 18 Mar 2024; SEC order, Advisers Act Release 6573.
Global Predictions
SettledSEC · 18 March 2024
- Who
- Global Predictions Inc.
- The AI claim
- Called itself the “first regulated AI financial advisor” and advertised expert AI-driven forecasts.
- Alleged
- The SEC found the AI claims on its website and social media were false and misleading. It also found a false tax-loss harvesting claim and an improper hedge clause in its client contract.
- Outcome
- Settled without admitting or denying the findings: censure, a cease-and-desist order and a $175,000 civil penalty.
Sources: SEC press release 2024-36, 18 Mar 2024.
FTC · 22 August 2023
- Who
- Automators AI and related companies; Roman Cresto, John Cresto and Andrew Chapman
- The AI claim
- Said it used AI and machine learning to run online stores that would earn investors high returns.
- Alleged
- The FTC said the earnings and AI claims were deceptive and lured consumers into investing about $22 million in online stores.
- Money at issue
- About $22M invested by consumers
- Outcome
- A federal court in San Diego halted the scheme in August 2023. Under later settlement orders, most of the defendants are banned for life from selling business opportunities or e-commerce coaching, with a $21,765,902.65 judgment that is partly suspended because they cannot pay it all. Global Investigations Review reports the orders were entered on 26 February 2024.
Sources: FTC press release, 22 Aug 2023; FTC settlement announcement; Global Investigations Review, 2026.
