A 50-year-old grandmother from Tennessee, Angela Lipps, spent more than five months in jail after being wrongly linked to bank fraud cases in North Dakota through an artificial intelligence (AI) facial recognition system, CNN has reported.

Police in Fargo, North Dakota, have acknowledged “a couple of errors” in the investigation and pledged operational changes, but stopped short of issuing a direct apology.

Lipps was first arrested in Tennessee on July 14, following a warrant issued weeks earlier in Fargo—over 1,000 miles from her home—after a series of bank fraud incidents in the area.

In their investigation, authorities relied partly on facial recognition technology from a partner agency, alongside other steps, before submitting the case to prosecutors.

However, Fargo Police Chief Dave Zibolski later admitted that reliance on information from a neighbouring agency’s AI system contributed to the misidentification.

“At some point, our partner agency in West Fargo purchased their own AI facial recognition system that we were not aware of at the executive level… and we would not have allowed that to be used. It has since been prohibited,” he said.

The West Fargo Police Department confirmed it used Clearview AI, a facial recognition tool with a vast database of images sourced online, which flagged Lipps as a “potential suspect” based on similarities to an image linked to a fake ID.

Lipps was arrested and spent over three months in a Tennessee jail before being extradited to North Dakota. She faced multiple charges, including felony theft and unauthorised use of personal identifying information.

She remained in custody until December, when her defence team presented bank records showing she was in Tennessee at the time the crimes were committed.

On December 23, authorities agreed to dismiss the charges without prejudice pending further investigation, and Lipps was released on Christmas Eve.

Describing her ordeal, Lipps said the extradition process was traumatic.

“It was the first time I had ever been on an airplane. I was terrified, exhausted, and humiliated,” she said via a GoFundMe post.

Her lawyers described the incident as devastating, citing loss of liberty, emotional trauma, and reputational damage. They are now exploring possible civil rights claims.

Fargo police said the case remains “open and active,” noting that charges could be refiled if new evidence emerges.
Chief Zibolski said the department has identified key lapses, including failure to independently verify AI-generated leads and to submit surveillance images to a certified state intelligence centre.

He added that the department will no longer rely on the neighbouring agency’s AI system and will instead work with state and federal partners. New oversight measures, including monthly reviews of facial recognition use, have also been introduced.

Lipps’ attorneys, however, criticised what they described as a lack of basic investigative diligence.

“Officers knew Angela was a Tennessee resident, yet made no effort to verify whether she was in North Dakota at the time of the crimes,” they said. “AI was used as a shortcut, resulting in an innocent woman being jailed.”

The case has reignited concerns over the growing use of AI in policing, with experts warning that while the technology can aid investigations, it must be applied with caution and backed by thorough human verification.