WASHINGTON — The U.S. Treasury Department is warning banks and other financial institutions to watch for suspicious money trails tied to illegal workers, shady labor brokers and employers accused of using unlawful labor schemes to dodge taxes, steal identities and undercut legitimate American businesses.
The Treasury Department’s Financial Crimes Enforcement Network, known as FinCEN, issued a joint advisory on June 5, 2026, urging financial institutions to detect and report illicit activity connected to the unlawful employment of people not authorized to work in the United States.
The advisory was issued with the Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency and National Credit Union Administration, and in coordination with the Internal Revenue Service.
Treasury Secretary Scott Bessent framed the move as part of President Donald Trump’s broader crackdown on illegal immigration and financial abuse.
“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 in the bulletin. “This Administration will not allow illegal aliens to abuse financial institutions to steal billions of dollars from hardworking American taxpayers.”
Federal officials say the risks go far beyond immigration violations. According to Treasury, illegal labor schemes can involve identity theft, payroll tax fraud, money laundering, shell companies, off-the-books payments and the exploitation of vulnerable workers by employers and labor brokers.
The advisory warns that employers who knowingly hire unauthorized workers can gain an unfair advantage over law-abiding businesses by lowering labor costs, avoiding payroll taxes and sidestepping workers’ compensation obligations. That can depress wages, punish honest employers and shift costs onto taxpayers.
FinCEN said financial institutions reported more than $2.5 billion in suspicious activity in 2025 tied to payroll tax fraud schemes.
The advisory also raises concerns about stolen Social Security numbers and other personal information. Treasury said unauthorized workers may use Social Security numbers or personally identifiable information belonging to U.S. citizens or lawful permanent residents to obtain jobs, wages, benefits, financial services or credit. For victims, that can lead to serious tax headaches, damaged records and other financial harm.
Federal officials also described a common scheme in which a labor broker sets up a shell company, sometimes using a foreign passport or Individual Taxpayer Identification Number to open a bank account. Employers then send checks to the shell company for supposed services or products. The broker allegedly launders the money and pays illegal workers through cash couriers, checks or peer-to-peer payment platforms, while avoiding federal and state payroll tax withholding.
The industries flagged in the advisory include agriculture, construction, domestic service, hospitality and other labor-heavy sectors where off-the-books payroll schemes can be hidden through subcontractors or labor brokers.
For businesses that follow the law, the advisory highlights a major competitive threat: companies using illegal labor can drive down costs by cheating the tax system and ignoring employment rules, while compliant employers pay the full cost of lawful hiring, taxes, insurance and workplace protections.
For banks, credit unions, casinos, money-services businesses, mortgage companies, insurance firms, securities firms and other covered institutions, the advisory adds pressure to watch for suspicious accounts, shell companies, unusual payroll activity and transactions that may point to illegal labor networks.
FinCEN’s advisory includes 18 red flags to help financial institutions identify suspicious activity. The agency is asking institutions to use the key term “FINANCIALINTEGRITY-2026-A002” when filing Suspicious Activity Reports connected to the advisory.
The bulletin also encourages banks to consider whether use of an Individual Taxpayer Identification Number, or ITIN, may be a relevant risk factor when a customer uses one instead of a Social Security number or valid employment authorization document to open an account or obtain credit. FinCEN said banks should make that assessment based on the full picture of available information, not one factor alone.
Treasury said the advisory supports Trump’s executive order, “Restoring Integrity to America’s Financial System,” and the administration’s effort to prevent the U.S. financial system from being used to support illegal employment, tax evasion and criminal networks.
The advisory also links some unlawful wage activity to broader criminal threats. Treasury said money obtained through illegal labor schemes can be used to support transnational criminal organizations involved in drug trafficking, human trafficking and other crimes.
FinCEN said suspicious activity reports help law enforcement “follow the money” and identify criminal actors who exploit the financial system. Treasury also encouraged the public and financial institutions to report tips about employers who knowingly hire or exploit unauthorized workers to Immigration and Customs Enforcement.