Treasury Announces Enhanced Fraud Detection Process Using AI Recovers $375M in Fiscal Year 2023

February 28, 2024 / Source: Treasury

WASHINGTON – Today, the U.S. Department of the Treasury announced that it has recovered over $375 million as a result of its implementation of an enhanced fraud detection process that utilizes Artificial Intelligence (AI) at the beginning of Fiscal Year 2023. Check fraud has increased nationwide by 385% since the pandemic. To address the increase in fraud, Treasury’s Office of Payment Integrity (OPI), within the Bureau of the Fiscal Service (Fiscal Service), implemented an enhanced process using AI 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,” said Deputy Secretary of the Treasury Wally Adeyemo. “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, a 23% increase over the number of check fraud-related SARs filed in 2020. This upward trend continued into 2022, when the number of SARs related to check fraud reached over 680,000, nearly double from the previous year’s filings. 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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