Treasury Urges Banks to Report Illegal Immigrant Payroll Fraud

The United States Department of the Treasury issued an advisory on June 5, 2026, urging banks, casinos, credit unions, and other financial institutions to identify and report red flags associated with the unlawful employment of immigrants. Coordinated by the Financial Crimes Enforcement Network (FinCEN) and other federal agencies, the guidance lists 18 indicators of fraud, including the use of shell companies, stolen Social Security numbers, and the misuse of Individual Taxpayer Identification Numbers (ITINs).

This action implements a May 19 executive order from President Donald Trump directing financial institutions to increase scrutiny of non-citizens' banking activities. While the administration originally considered mandatory citizenship collection, the final directive provides guidance rather than a strict mandate following lobbying from the banking industry regarding operational costs.

Treasury Secretary Scott Bessent stated that securing the financial system is a key part of the administration's border security efforts. The Treasury noted that payroll fraud schemes involving unauthorized workers exceeded $2.5 billion in 2025, depressing wages and facilitating identity theft. Financial institutions are encouraged to file suspicious activity reports with FinCEN and submit tips to U.S. Immigration and Customs Enforcement. While the advisory is not legally binding, failure to comply may result in regulatory penalties.