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Elbert Coleman, III; Elbert Coleman, IV v. Nexo Capital Inc.

Court
S.D. Indiana
Jurisdiction
USA
Decided
2026-03-31
AI tool
Implied
Outcome
Warning
Monetary penalty
None reported

What was hallucinated

Outdated Advice: Repealed Law | Plaintiffs cited "Indiana Code § 23-2-1-2" for the proposition that transactions involving unregistered securities are void; the court found the statute has been repealed. || Fabricated: Case Law | Plaintiffs cited "Kramer v. Trans-Lux Corp., 24 F.3d 1001 (7th Cir. 1994)"; the court found no such Seventh Circuit opinion and noted a District of Connecticut decision with that name instead.

Sanction teardown · S.D. Indiana, USA · 2026-03-31

Elbert Coleman, III; Elbert Coleman, IV v. Nexo Capital Inc.

What happened

In S.D. Indiana, USA, a filing relied on an unnamed/unconfirmed AI tool to help draft legal argument. The court identified the following problems with the citations in that filing:

  • Outdated Advice (Repealed Law)
    Plaintiffs cited "Indiana Code § 23-2-1-2" for the proposition that transactions involving unregistered securities are void; the court found the statute has been repealed.
  • Fabricated (Case Law)
    Plaintiffs cited "Kramer v. Trans-Lux Corp., 24 F.3d 1001 (7th Cir. 1994)"; the court found no such Seventh Circuit opinion and noted a District of Connecticut decision with that name instead.

Which AI tool

an unnamed/unconfirmed AI tool. Note: Charlotin's public database records tool attribution only where a court order, brief, or reporting on the matter states it explicitly; "unidentified" or "implied" means the record indicates AI use but does not name a specific product — we do not guess.

Outcome

Warning

How Citation Safe would have caught this

Citation Safe runs three deterministic layers before a brief is filed: (1) does the citation exist against CourtListener's database of published opinions, (2) if quoted, does that exact language appear in the source, (3) does the cited case actually support the proposition it is cited for. Fabricated case citations fail Layer 1. Fabricated or misattributed quotations fail Layer 2 even when the underlying case is real. Misrepresented holdings — a real case cited for a proposition it does not support — are the target of Layer 3. None of these checks involve asking another language model whether the citation looks right; they are lookups and text-matches against the actual source, which is why a hallucinated citation has to survive a direct lookup against the authoritative source — not another model's opinion — to earn a VERIFIED stamp; our measured false-verify rate is published live at /quality.

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Source: https://www.damiencharlotin.com/documents/1986/Coleman_v._Nexo_Capital_USA_31_March_2026.pdf, via Damien Charlotin's public AI Hallucination Cases Database (CC0).

Source: https://www.damiencharlotin.com/documents/1986/Coleman_v._Nexo_Capital_USA_31_March_2026.pdf

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