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Re Reza Khoshnik

Court
Ontario SCJ (Bankruptcy)
Jurisdiction
Canada
Decided
2026-03-16
AI tool
Unidentified
Outcome
Adverse Costs Order
Monetary penalty
1 CAD

What was hallucinated

Misrepresented: Case Law | Bankrupt quoted and attributed a proposition to Re Fakoori that he later admitted was manufactured by his materials. || Misrepresented: Case Law | Bankrupt cited Wang v. Wang as if it supported the proposition that bankruptcy courts can routinely decide complex fraud claims during bankruptcy proceedings; court found the cited case unrelated to that proposition. || Misrepresented: Case Law | Bankrupt relied on Simone v. Daley to support that certain breach-of-trust determinations belong within bankruptcy proceedings; the court found the Bankrupt mischaracterized the authority (appeal reversed the relevant finding).

Sanction teardown · Ontario SCJ (Bankruptcy), Canada · 2026-03-16

Re Reza Khoshnik

What happened

In Ontario SCJ (Bankruptcy), Canada, 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:

  • Misrepresented (Case Law)
    Bankrupt quoted and attributed a proposition to Re Fakoori that he later admitted was manufactured by his materials.
  • Misrepresented (Case Law)
    Bankrupt cited Wang v. Wang as if it supported the proposition that bankruptcy courts can routinely decide complex fraud claims during bankruptcy proceedings; court found the cited case unrelated to that proposition.
  • Misrepresented (Case Law)
    Bankrupt relied on Simone v. Daley to support that certain breach-of-trust determinations belong within bankruptcy proceedings; the court found the Bankrupt mischaracterized the authority (appeal reversed the relevant finding).

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

Adverse Costs Order (monetary penalty: 1 CAD.)

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.

Check a brief before you file it → · See our live false-verify rate

Source: https://www.damiencharlotin.com/documents/1871/2026onsc1581.pdf, via Damien Charlotin's public AI Hallucination Cases Database (CC0).

Source: https://www.damiencharlotin.com/documents/1871/2026onsc1581.pdf

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