California lawmakers target AI-fueled fraud in new House bill

The AI Fraud Deterrence Act from Reps. Lieu and Kiley would impose stiffer penalties on individuals who use AI to commit fraud.

By Matt Bracken

November 15, 2024

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Rep. Ted Lieu, D-Calif., speaks at a news conference after a meeting at the U.S. Capitol Building on Sept. 19, 2023 in Washington, D.C. (Photo by Anna Moneymaker/Getty Images)

A bipartisan pair of House lawmakers are pushing for stiffer penalties for individuals who use artificial intelligence to commit various forms of fraud.

The AI Fraud Deterrence Act — introduced Friday by California Reps. Ted Lieu, a Democrat, and Kevin Kiley, a Republican — would increase the fines imposed on people who use the technology for wire fraud, mail fraud, bank fraud or money laundering.

“Criminals have access to more information and technology than ever before and that puts everyday Americans at greater risk of becoming victims of fraud or scams,” Lieu said in a statement. “We should have in place harsh punishments for using this technology to clone voices, create fake videos, doctor documents and cull information rapidly in the commission of a crime. Increasing the penalties for committing fraud using AI is one way to deter bad actors from abusing this technology.”

Under current law, bank fraud carries a maximum fine of $1 million. Under the new bill, the maximum fine for AI-fueled fraud would jump to $2 million.

For money laundering, the maximum fine is currently set at $500,000, or twice the value of the property, depending on which value is greater. If AI is used to launder money, the bill calls for those figures to jump to $1 million, or three times the value of the property.

Penalties for mail fraud and wire fraud, meanwhile, would be bumped up from a maximum fine of $250,000 to $1 million if the fraud was committed with AI.

If either mail or wire fraud targets disaster aid or financial institutions, the maximum penalty is currently $1 million. The legislation calls for that figure to be boosted to $2 million, regardless if AI is used or not.

“The AI Fraud Deterrence Act represents a critical step in safeguarding our digital ecosystems and establishing protections against misuse while fostering trust in technology,” Kiley said. “By strengthening penalties for criminal misuse, we make it likelier that innovation will serve the public good.”