By PAUL O’DONOGHUE, Senior Correspondent
THE U.S. Treasury Department has urged banks to detect signs of employment of ‘illegal aliens’.
The guidance came from FinCEN, the Treasury’s AML unit. It asked financial institutions to strengthen scrutiny of transactions linked to the employment of undocumented migrants and related payroll fraud schemes.
The agency told banks to scrutinise severl ‘red flags’. These included:
- Uses an SSN (Social Security Number) that does not match or is inconsistent with the SSA’s (Social Security Administration) records.
- Receives recurring payments from a small, recently established company in the agriculture, construction, domestic service, hospitality, or staffing industries.
- Cashes a significant volume of checks from companies in these sectors.
- A business in these sctors attempting to use a Commercial Mail Receiving Agency instead of a business address.
FinCEN issued the advisory jointly with several U.S. banking regulators. It includes 18 red-flag indicators to help institutions identify suspicious activity.
The full list of red flags is available [HERE].
FinCEN urges crackdown on employment of ‘illegal aliens’
“As no single red flag is determinative of illicit or suspicious activity, no single red flag should be taken in isolation,” FinCEN said.
“Financial institutions should consider the surrounding facts and circumstances.” It said these could “a customer’s historical financial activity”. They could also consider whether the transactions “are in line with prevailing business practices”,
According to FinCEN, financial institutions reported more than $2.5 billion in suspicious activity linked to payroll tax fraud schemes during 2025.
The agency said that employers who knowingly hire and conceal workers without legal authorisation can “gain an unfair advantage over legitimate U.S. businesses”.
Scott Bessent, the Treasury Secretary, said the move forms part of the Trump administration’s effort to secure the U.S. financial system.
“President Trump has done more than anyone in history to secure our nation’s borders. Part of that effort includes securing our financial system,” Bessent said.
He added: “This Administration will not allow illegal aliens to abuse financial institutions to steal billions of dollars from hardworking American taxpayers.”
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