Overview
- FinCEN issued the advisory on June 5 directing banks and other financial firms to watch for about 18 specific red flags that may signal payroll‑tax fraud or money laundering tied to hiring unauthorized workers.
- The guidance describes typical schemes where labor brokers set up shell companies, open accounts with foreign passports or ITINs, deposit phantom checks, and use stolen or bought Social Security numbers to pay workers off the books.
- Treasury said financial institutions reported roughly $2.5 billion in suspicious activity linked to payroll fraud in 2025 and urged banks to file suspicious activity reports, with optional referrals to ICE’s tip site for possible law enforcement action.
- FinCEN emphasized the advisory is nonbinding but carries regulatory weight and applies beyond banks to credit unions, money services businesses, casinos, insurers, mortgage firms, and precious‑metals dealers.
- The move implements part of President Trump’s May executive order while stressing that no single indicator proves guilt and raising concerns that increased screening could raise compliance costs and restrict banking access for vulnerable customers.