Tennessee grandma sues city for $10,000,000 after she is accused of theft with AI facial recognition backfiring

A woman who was allegedly arrested at gunpoint in front of four children she was taking care of is suing the City of Fargo.

In July 2025, Angela Lipps was arrested at her rental home in Tennessee, allegedly having 'no idea' why she had been detained. She was held for several months in Carter County before being extradited to Cass County, North Dakota, which is over 1,200 miles away.

Lipps, who was being held on a $100,000 bond at the time, was then charged with eight felonies related to bank fraud and was held behind bars for six months.

But Lipps was innocent, and she had been wrongly identified as the criminal behind numerous instances of bank fraud in Fargo, a city she says she had never visited before her arrest.

AI facial recognition wrongly pinned Lipps to the crimes because she had 'similar features' to a suspect cops had been searching for.

AI wrongly detected Lipps as a suspect (Fargo Police Department)

Allegedly, a West Fargo Police Department investigator had identified Lipps' social media photo as a potential lead in a bank theft investigation.

When police realized their mistake, Lipps' charges were dropped and she was released from prison.

In light of the ordeal last year, Lipps, 50, filed a lawsuit against the City of Fargo this week for $10,000,000, ABC News reports.

Part of her complaint alleges: "They knew that AI facial recognition technology should not be used as the sole basis to extradite and charge a person. Yet they ignored those issues and gave no care to the harm it would do to innocent people like Lipps.

"As AI facial recognition technology becomes more accessible and widespread, Lipps hopes that her case will cause officers to use appropriate care and consider the harm their actions can have on those who are wrongly accused."

Lipps is said to have 'experienced traumatic conditions in the jails' after being detained for several months, and 'struggled with the fear of not knowing when she would be released or whether she would end up wrongly convicted and imprisoned for years'.

Angela is now suing the City of Fargo for $10 million (WDAY)

The complaint further states: "She missed family birthdays. She spent her own birthday incarcerated, separated from her family. She missed holidays with her loved ones, including Thanksgiving and Christmas. While in custody, she was denied basic care, such as her medications and her dentures."

Upon Lipps' release, she learnt that she'd lost her residence, car, and other personal items.

She was released on Christmas Eve 2025 'into the freezing cold' and with 'no way to get home to Tennessee', according to the lawsuit.

It adds: "Since the incident, she lives in fear that she will be abducted again and has been left with the knowledge that even though she was innocent, she is not safe."

As for the $10,000,000 sum, her attorney, Eric Rice, says the figure 'reflects the specific harm' to his client.

In the suit, Lipps brings five counts against the city and lead detective on the case. The counts are Fourth Amendment unlawful seizure/arrest, Fourteenth Amendment due-process violations, a Monell civil-rights claim, false arrest and imprisonment, and malicious prosecution.

The City of Fargo has not responded to the suit. When asked by news outlets for comment, it said: "The City does not comment on pending litigation."

UNILAD has contacted the City of Fargo for a comment.