AI has delivered technological advancements like we have never seen before. While it can make business operations and processes more efficient, it can also present unfamiliar challenges. One of those challenges involves financial fraud. While AI can help companies make and facilitate financial transactions much easier, these systems are imperfect and can be subject to mistakes. And, because business financial transactions are heavily regulated, small mistakes can result in sweeping accusations and serious criminal charges.
What financial fraud can look like with AI
While businesses build upon and improve their use of AI-driven fintech, not all these tools can recognize when or how a money transaction mistake could become fraudulent. Additionally, stakeholders within companies may also try to use AI as a tool for committing fraud. Here are a few examples of how AI could accidentally commit or get used for fraudulent financial activity:
- Using fake insider information to buy and trade stocks.
- Distributing company funds looks like embezzlement.
- Sharing sensitive employee, customer or stakeholder data with the wrong parties.
- Giving people access to accounts and information they should not have access to.
Even if these examples stem from technological errors, they can still look like intentional fraud to authorities and result in a criminal investigation. And since financial crimes have become increasingly prevalent in Indiana, state prosecutors take these accusations very seriously.
IRS is utilizing AI technology to identify AI-driven fraud
In response to the fast-changing nature of financial crimes, the criminal investigation unit of the IRS has developed a new program intended to help the government and financial institutions detect AI-driven fraud. The program, known as Feedback in Response to Strategic Threat (CI-FIRST), could make it easier for the IRS to request subpoenas and help organizations gain insight and analysis into the sources and causes of financial crimes that were previously unattainable. While CI-FIRST can be a useful tool to weed out fraudulent activity in your business, it, too, is not a perfect tool and can be subject to errors. When that happens, you could find yourself facing fraud charges. You can challenge the data’s validity and the system’s processes to detect fraud by developing a robust and comprehensive defense strategy with the assistance of a skilled white collar crime defense attorney.
You can defend yourself against AI-driven fraud charges
If you face a financial fraud charge due to AI, it’s vital to critically assess the evidence and the methodologies used in the investigation. You may wish to challenge the validity of the data collected or question the reliability of the justice system’s use of AI in its investigation. Demonstrating your intent and the context of actions can also be pivotal in building your case. A criminal defense attorney at Harwell Gray Legal Counsel LLC can help you build a strong defense.