AIFoPa-2025-0002 — Deloitte Submits $290,000 Government Report Containing Fabricated Court Quotes, Non-Existent Academic Sources, and One Invented Judge

In October 2025, the New South Wales government received a commissioned report from Deloitte. The report concerned health system reform. It cost $290,000. It cited academic literature, legal precedents, and expert authorities. Several of these did not exist.

Dr. Chris Rudge, a transplant surgeon and health administrator whose work had been cited in the report, read the citation and recognized immediately that the book attributed to his colleague had never been written. "I instantaneously knew it was either hallucinated by AI or the world's best kept secret," he told journalists, "because I'd never heard of the book and it sounded preposterous."

Further review revealed the scope of the fabrication. Justice Davis, cited as authority for a legal proposition, does not exist in any Australian court. Several case citations led to proceedings that had never occurred. Academic papers were attributed to real scholars who had not written them. The pattern was consistent with a language model producing plausible-sounding but unverified citations — a failure mode well-documented in the academic literature since at least 2023, and present in virtually every major AI hallucination incident involving formal documentation.

The report had been submitted on a Friday. The Bureau notes this without editorial comment. The Bureau simply notes it.

Deloitte's response, when the fabrications became public, was that the substance of the report remained valid. This position — that the scaffolding being fictional does not necessarily compromise the building — is one the Bureau has encountered before, in different contexts, and has placed in a private document labeled Responses That Are Technically an Argument. Whether the substance was valid was not the question most observers were asking. The question most observers were asking was whether a firm charging $290,000 for a report had checked whether the judge it cited existed. The answer was, demonstrably, no.

A partial refund was issued. The report was revised. The Bureau considers this incident closed in the procedural sense. In the broader sense, the Bureau considers nothing closed.