Law360 (April 20, 2026, 4:14 PM EDT) -- A Pennsylvania federal judge said she was "appalled" by a lawyer's repeated use of bogus citations in court documents generated with artificial intelligence and has ordered a $5,000 sanction and additional classes in AI ethics for the attorney.

Raja G. Rajan was directed to pay a $5,000 penalty and complete additional continuing legal education courses on AI and legal ethics after U.S. District Judge Kai N. Scott found he had failed to explain why made-up cases were used as citations in briefs created using AI software, according to an order published Monday. It was the second time Rajan had used AI to create court documents without checking the accuracy of the citations, and he was previously penalized $2,500, according to the order.

"The court remains appalled by Mr. Rajan's improper conduct," Judge Scott wrote in her memorandum supporting the sanctions order. "Should Mr. Rajan engage in this improper conduct before this court a third time, this court will not hesitate to sanction him once more and refer him to the Pennsylvania Disciplinary Board for further proceedings."

The sanctions over the improper use of AI technology to complete court documents are in addition to the more than $78,000 in attorney fees Rajan has been ordered to pay the plaintiff in the underlying case after the judge found he had unreasonably forced opposing counsel to spend time responding to frivolous counterclaims and overbroad discovery requests on behalf of his client.

In May 2023, Mark Bunce filed a federal lawsuit claiming breach of contract and fraud against Visual Technology Innovations Inc. and its primary shareholder, Mathu G. Rajan. According to the original complaint, Bunce loaned VTI more than $1 million after he was told the money would help leverage at least $29 million in investments for a company that held patents in 3D television technology. The complaint says VTI's claims were false, and the company had no intellectual property, assets or customers, and that it did not repay the loan.

Judge Scott ruled in favor of Bunce in March and ordered the defendants to pay the plaintiff more than $1.38 million for breach of contract and fraud. Following the final judgment, Bunce sought reimbursement from Raja Rajan for his travel to Philadelphia in June 2024 for a deposition that was unilaterally canceled by Rajan, the recent sanctions order says.

According to Judge Scott's sanctions memorandum, Rajan filed his own motion seeking sanctions and objecting to Bunce's request for travel cost reimbursement. The motion was generated using AI software and contained a made-up case as a citation, the sanctions order says.

Rajan was ordered to reimburse Bunce for the travel and file a response to show cause as to why he failed to review his AI-generated document for erroneous citations. In the response, Rajan said any reasonable attorney would have filed the motion with erroneous citations because opposing counsel refused to meet with him to discuss the travel fees. Rajan also claimed he did not have enough time before the deadline to submit his response to Bunce's request, and that his legal background dealt primarily with business matters, not courtroom proceedings.

Judge Scott rejected each of the arguments, saying Rajan was unable to identify a valid reason for the erroneous citations.

"Any first-semester, first-year law student would know that a fundamental rule of lawyering — during litigation or otherwise — is to ensure that any authority to which a lawyer cites does indeed support the proposition for which he cites it," Judge Scott said in her memorandum.

Rajan was terminated from the defense in April 2025. He could not be reached for comment Monday. Attorneys representing both parties in the underlying litigation were not immediately available for comment Monday afternoon.

The plaintiff is represented by Michael D. Homans of Homans Peck LLC and Michael P. Kohler of Miller & Martin PLLC.

The defendants are represented by Leroy J. Janiczek and Rafael X. Zahralddin-Aravena of Lewis Brisbois Bisgaard & Smith LLP.

The case is Mark L. Bunce v. Visual Technology Innovations Inc. et al., case number 2:23-cv-01740, in the U.S. District Court for the Eastern District of Pennsylvania.

--Editing by Linda Voorhis.

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