AI Fraud Deterrence Act Quadruples Fines and Adds 20 Years for Wire Fraud if AI Is Used

The new AI Fraud Deterrence Act is the federal government’s move to stop scammers from weaponizing artificial intelligence. Simply put, this bill targets financial crimes and federal official impersonation, dramatically increasing the penalties when AI tools are involved. If you commit mail fraud, wire fraud, or money laundering, and you used AI to help, your maximum fine could jump from $1 million to $2 million, and you could face up to 20 years in prison instead of the current maximums.

The AI Tax on Financial Crime

For a regular person, this bill is about protecting your bank account and your identity from increasingly sophisticated scams. We’re talking about mail fraud (18 U.S.C. § 1341) and wire fraud (18 U.S.C. § 1343)—the laws that cover everything from phishing emails to sophisticated investment scams. Under this act (SEC. 3), if a scammer uses AI—say, a generative text program to craft thousands of personalized phishing emails or a voice cloning tool to run a grandparent scam—they face a new, enhanced penalty of up to a $1 million fine and 20 years in prison. For bank fraud (18 U.S.C. § 1344), the penalty is even steeper: up to $2 million fine and 30 years in prison when AI is used.

This isn't just about bigger numbers; it’s about modernizing the law. The bill acknowledges that AI makes these crimes scalable and harder to detect, so it hits back with serious deterrence. For money laundering (18 U.S.C. § 1956), the enhanced penalty includes a fine of up to $1 million or three times the value of the money involved, whichever is greater, plus 20 years. This means if you launder $10 million using AI tools, you're looking at a $30 million fine, not just $1 million.

Targeting Deepfakes of Federal Officials

The second major focus of the act (SEC. 4) addresses the high-profile threat of deepfake impersonation. The bill specifically amends the law against impersonating a federal officer or employee (18 U.S.C. § 912). This is a direct response to real-world incidents where AI was used to clone the voices of high-level officials like the White House Chief of Staff and the Secretary of State to try and extract sensitive information.

If someone violates this law using AI, they face an enhanced penalty of up to a $1 million fine and 3 years in prison. Crucially, the bill includes a protection clause: it clarifies that this law does not limit legitimate uses of AI for satire, parody, or other First Amendment-protected expression, as long as the content includes a clear disclosure that it is not authentic.

What “Artificial Intelligence” Means Here

To keep things clear, the act defines “artificial intelligence” by cross-referencing an existing law—section 5002 of the National Artificial Intelligence Initiative Act of 2020 (SEC. 3 & SEC. 4). This move gives law enforcement a clear, established definition to work with, minimizing legal ambiguity. For busy people, the takeaway is simple: the law is catching up to the tech. If criminals use AI to make their scams more effective, the penalties they face are now exponentially higher.