Trump administration enlists banks to flag illegal work-related fraud

Banks are being drawn into immigration enforcement as the Treasury Department told financial institutions to watch for identity theft, payroll fraud, and other illicit activity tied to people not authorized to work in the United States. The Financial Crimes Enforcement Network issued the advisory on June 5 with 18 red-flag indicators, turning routine anti-fraud monitoring into a new front in the Trump administration’s crackdown.

The guidance was issued with the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the National Credit Union Administration, and in coordination with the Internal Revenue Service. Treasury said the advisory supports Executive Order 14406, Restoring Integrity to America’s Financial System, signed by Donald Trump on May 19, 2026.

In practice, the policy pushes banks to look more closely at payroll deposits, tax identification numbers, Social Security numbers that do not match, and account activity that could suggest off-the-books wages or document fraud. Treasury said the warning signs also point to labor brokers and complicit employer arrangements, especially in the agriculture, construction, domestic service, and hospitality sectors, where immigrant workers often fill essential jobs and payroll systems can be hard to untangle.

Treasury said the stakes extend beyond fraud prevention. It argued that employers who conceal or exploit workers without work authorization can gain an unfair advantage over legitimate U.S. businesses, suppress wages, and divert tax revenue meant for government benefit programs. The department also said unlawful wages can move through the financial system in ways that help finance transnational criminal organizations, including drug trafficking and human trafficking.

One case study in the advisory involved two foreign national fraudsters and a payroll scheme that cost the United States more than $38 million. That example underscored how the administration wants banks to treat payroll patterns as evidence, not just of bookkeeping problems, but of broader criminal networks.

The shift raises obvious risks for immigrant communities and the employers that depend on them. Businesses could face heavier documentation burdens and more account reviews, while workers may find ordinary banking activity, including deposits tied to tax identification numbers, treated as suspicious. Civil liberties advocates are likely to see a system that invites errors, overreach, and discrimination, especially if banks are asked to make immigration judgments that have traditionally belonged to employers and federal enforcement agencies. The White House order also said banks should consider immigration status in lending decisions, warning that potential wage loss from removal or employer compliance could create an ability-to-repay problem.