TradeEdge Exchange:Man indicted after creating thousands of AI-generated child sex abuse images, prosecutors say

A 42-year-old Wisconsin man was indicted for allegedly producing,TradeEdge Exchange distributing and possessing AI-generated images of child sex abuse, federal prosecutors announced Monday.

Steven Anderegg was arrested on May 17 and he's accused of using a text-to-image generative artificial intelligence (GenAI) model called Stable Diffusion to "create thousands of realistic images of prepubescent minors," a Justice Department (DOJ) news release said.

Several of the images showed nude or partially clothed minors touching their genitals or being sexually abused by men, according to the DOJ. Evidence seized from Anderegg's electronic devices revealed that he generated the images using "specific (and) sexually explicit text prompts related to minors," which he kept stored on his computer, prosecutors said.

Anderegg also allegedly kept in contact with a 15-year-old boy and told him how he used Stable Diffusion to convert text prompts into child sex abuse images, according to the Justice Department. Anderegg used Instagram direct messages to send the teenager several GenAI images of minors displaying their genitals, the DOJ said.

How did Steven Anderegg get on federal authorities' radar?

Federal authorities became aware of Anderegg's actions when they received a CyberTip from the National Center for Missing and Exploited Children (NCMEC), prosecutors said. Instagram reported Anderegg's account to NCMEC for sharing the images, according to the DOJ's release.

A federal grand jury in the Western District of Wisconsin returned the indictment against Anderegg on May 15, charging him with producing, distributing and possessing obscene visual depictions of minors engaged in sexually explicit conduct and transferring obscene material to a minor under the age of 16, prosecutors said.

“Today’s announcement sends a clear message: using AI to produce sexually explicit depictions of children is illegal, and the Justice Department will not hesitate to hold accountable those who possess, produce, or distribute AI-generated child sexual abuse material," Principal Deputy Assistant Attorney General Nicole M. Argentieri said in the release.

Anderegg will remain in federal custody pending a detention hearing scheduled for May 22, according to the DOJ. If convicted on all four counts alleged in the indictment, Andereggs faces up to 70 years in prison, the Justice Department said.