Treasury Secretary Scott Bessent said Friday that illegal employment schemes generated more than $2.5 billion in suspicious activity tied to payroll tax fraud in 2025.
Speaking at an event with Texas bankers in Houston, Bessent said financial institutions reported more than $2.5 billion in suspicious activity linked to payroll tax fraud schemes this year alone. He connected those schemes to unlawful employment practices, labor brokers, shell companies, identity theft, and other forms of financial exploitation.
“In 2025 alone, financial institutions reported more than $2.5 billion in suspicious activity associated with payroll tax fraud schemes,” Bessent said. “These schemes hurt law-abiding businesses, depress wages, steal taxpayer dollars, facilitate identity theft, and create opportunities for transnational criminal organizations to generate and move illicit proceeds.”
Bessent said the issue is tied to the Trump administration’s efforts to combat illegal immigration, fraud, and financial crime.
“Texas remains on the front lines of the challenges created by years of unchecked illegal immigration under the Biden Administration,” Bessent said. “Criminal organizations and cartels continue to seek opportunities to exploit our financial system and harm law-abiding businesses and workers.”
The treasury secretary highlighted a recent advisory issued by the Treasury Department and the Financial Crimes Enforcement Network (FinCEN) that identifies warning signs associated with unlawful employment schemes. The guidance focuses on payroll tax evasion, shell companies, labor brokers, identity theft, and other activities that may indicate financial crimes.
“The advisory does not ask banks to become immigration officers,” Bessent said. “It asks banks to do what they do best: know their customers, identify risk, recognize suspicious patterns, and report illicit activity when they see it.”
Bessent said that community banks serve as a critical line of defense against money laundering, labor exploitation, and cartel-linked financial activity because local institutions often recognize emerging risks before they appear in national data.
“Economic security is national security,” he said.
The secretary also announced updated FinCEN guidance designed to allow financial institutions to share information about fraud more quickly and coordinate more closely with one another. He said the effort supports the White House Task Force to Eliminate Fraud, led by Vice President JD Vance.
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