Treasury uses AI process to detect fraud, recovers $375M

The U.S. Department of the Treasury has recovered over $375 million in the past year through an enhanced fraud detection process that utilizes artificial intelligence (AI).

Since the start of the pandemic, check fraud has increased nationwide by 385 percent. To address this increase in fraud, the Treasury’s Office of Payment Integrity (OPI), located within the Bureau of the Fiscal Service (Fiscal Service), implemented this new enhanced process using AI.

The technology is designed to mitigate check fraud in near real-time by strengthening and expediting processes to recover potentially fraudulent payments from financial institutions.

“The Treasury Department is committed to safeguarding taxpayer dollars through payment integrity – paying the right person, in the right amount, at the right time, and ensuring that Social Security payments, tax refunds, and other types of checks, and people who are receiving them, are safe from fraud,” Deputy Secretary of the Treasury Wally Adeyemo said. “We are using the latest technological advances to enhance our fraud detection process, and AI has allowed us to expedite the detection of fraud and recovery of tax dollars.”

In 2021, financial institutions filed over 350,000 Suspicious Activity Reports (SARs) to FinCEN to report potential check fraud. This represented a 23 percent increase over the number of check fraud-related SARs filed in 2020.

The trend continued into 2022, when the number of SARs related to check fraud reached over 680,000 — nearly twice the previous year’s filings. In addition, incidents of Treasury check fraud are also on the rise.

The enhanced AI process and OPI’s strong partnership with federal law enforcement agencies have led to multiple active cases and arrests with law enforcement.

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