The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an advisory requesting that banks “detect and report” payroll fraud schemes tied to illegal immigrant employment.
The Treasury Department’s measure comes after President Donald Trump signed an executive order directing bank regulators and government departments to inspect potential instances of individuals without legal status opening bank accounts or obtaining loans or credit cards.
According to the Treasury Department, these payroll schemes involving the “hiring, concealing, and exploiting non-work-authorized” individuals give employers an advantage over “legitimate U.S. businesses.”
This advantage additionally depresses wages, encourages American identity theft, and steals tax revenue meant to fund government benefit programs, the department argues.
What Does The Advisory Disclose?
In the advisory, FinCEN provides a list of “red flags” of individuals and both small and large businesses in the agriculture, construction, domestic service, hospitality, or staffing industries for banks to look out for.
Some red flags include:
- An individual who opens a bank account using a non-U.S. passport or Individual Tax-payer Identification Number (ITIN), claiming to be self-employed or operating a small business in the aforementioned industries, and “is receiving a significant amount and volume of recurring check deposits from multiple companies before either making a significant and repetitive amount of structured cash withdrawals or issuing low-dollar checks to multiple individuals.”
- An individual who receives recurring Peer-to-peer payments from a small, recently established company in the aforementioned industries
- An individual who works in the aforementioned industries and “opens a bank account with an ITIN with little to no transactional activity besides remittances to foreign jurisdictions.”
According to The Associated Press (AP), since banks do not collect information regarding a customer’s immigration status or citizenship, there are no public estimates on the risks these payroll schemes pose to the financial system.
Secretary Bessent Affirms Trump Administration's Efforts
“President Trump has done more than anyone in history to secure our nation’s borders. Part of that effort includes securing our financial system,” Treasury Secretary Scott Bessent affirmed. “This Administration will not allow illegal aliens to abuse financial institutions to steal billions of dollars from hardworking American taxpayers.”
