Key insights:

• • • SAR volume is significantly underreported — Continuing and amended filings add approximately 20% to the official count yet remain invisible in trend analyses.

    • Filing activity is highly concentrated — A few large financial institutions dominate SARs volume, meaning trends reflect their practices more than systemic changes.

    • Agentic AI will drive a surge in SARs — Agentic AI risks increased noise over actionable intelligence, without addressing the unresolved question of whether current filings yield meaningful law enforcement outcomes.

The Suspicious Activity Reports (SAR) that financial institutions file with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) provide valuable insight, although they may not offer a comprehensive picture.

Prior to meaningful discussions regarding the future of SARs, it is essential for the financial crime community to clarify what is being measured. In 2025, for example, SAR filings of more than 4.1 million, representing an almost 8% increase compared to the total number of SARs filed in 2024.

Every figure FinCEN has published reflects original SARs only. Continuing activity SARs, which represent roughly 15% of all filings, are submitted under the original Bank Secrecy Act (BSA) identification number and never appear as new filings. Corrected and amended SARs add another 5% on top of that. This makes the real volume of SARs activity approximately 20% higher than what is reported.

The average community bank files fewer than one SAR a week, while the largest institutions file more than 500 a day.

Recent FinCEN guidance giving financial institutions more flexibility around continuing activity SARs sounds significant on paper, but as former Wells Fargo BSA/AML chief Jim Richards points out: “It won’t change the reported numbers — because those filings were never counted to begin with.” Financial crime professionals need to keep that gap in mind every time a trend line gets cited.

2025 was steady, not spectacular

There were roughly 300,000 SARs filed every single month of 2025, and the most notable thing is that nothing notable happened. That is likely a first on the volume side and worth acknowledging, but beyond that milestone the year did not hand financial crime professionals anything noteworthy. In a space that has dealt with pandemic distortions, crypto chaos, and fraud spikes that seemed to come out of nowhere, steady volume and predictable patterns are a little surprising. A quiet data set, however, is not the same as a quiet landscape, and financial crime professionals who are reading stability as stagnation may find themselves flat-footed when the numbers start moving again.

For example, one of the most underleveraged insights in the SARs space is just how concentrated filing activity really is. The numbers are stark: The top four banks file more SARs in a single day than 80% of the rest of the banks file in 10 years, according to 2019 data from a .

The average community bank files fewer than one SAR a week, while the largest institutions file more than 500 a day. “50 a year versus 500 a day,” notes Wells Fargo’s Richards, adding that such asymmetry has real implications for how the financial industry interprets trends. Meaningful movement in SARs data, up or down, is almost entirely dependent on what a handful of mega-institutions decide to do.

Not surprisingly, money services businesses (MSBs) are the second largest filing category, and virtual currency exchanges are almost certainly driving recent growth there, even if outdated category definitions make that difficult to confirm directly. Credit unions round out the top three.

The filing philosophy hasn’t changed and shouldn’t

Regulatory noise occasionally suggests that institutions should be more selective about what they file. However, compliance and legal reality have not shifted. No institution has ever faced serious consequences for filing too many SARs, and the cases that result in enforcement actions, reputational damage, and regulatory scrutiny are consistently about missed filings or late ones.

“You’re not going to get in trouble from filing too much,” Richards says. “Nobody ever has, and I doubt if anyone ever will.” For financial crime professionals, the calculus remains exactly what it has always been — when in doubt, file. That posture isn’t going to change, and frankly it shouldn’t.

Yet, here is where the SARs space gets genuinely interesting. Agentic AI use in SARs filings — systems in which multiple AI agents work through a case from screening to decision to documentation — is beginning to move from concept to deployment. The impact on filing volume likely will be significant.

The risk is a system flooded with AI-generated SARs of variable quality, creating more noise for law enforcement to sort through rather than sharper intelligence to act upon.

Whereas a small team today might work through a handful of cases a week, AI-assisted workflows could push that into the dozens. Multiply that across institutions already inclined to file rather than miss something, and the result is a coming surge in SARs volume that could play out over the next two to four years.

“Agentic AI has the potential to be a game changer on how we do our work,” Richards explains. “But I believe it’ll guarantee that there will be more SARs filed and not necessarily better and fewer SARs filed.” Indeed, the critical point for the financial crime community to internalize is exactly that.

The risk is a system flooded with AI-generated SARs of variable quality, creating more noise for law enforcement to sort through rather than sharper intelligence to act upon. Once the largest institutions adopt agentic AI as a best practice, others will follow quickly, and regulators will likely be several steps behind.

The value question can’t wait

The has been in place since 2014. Yet after 12 years of filings, the financial crime community still lacks a clear public accounting of whether that data has produced actionable law enforcement outcomes.

So, the question Richards is asking is one the entire industry should be asking: “Has anybody asked law enforcement?”

This question reflects a larger challenge that the industry needs to confront more aggressively, especially as AI technology is set to dramatically increase filing volume across the board. Increasing the volume without improving how the information is used does not represent progress. If SARs are not generating real investigative value, the solution is not to file more of them faster — instead, the pipeline should be fixed before it grows any bigger.

Please add your voice to ¶¶ŇőłÉÄę’ flagship , a global study exploring how the professional landscape continues to change.Ěý

Key insights:

• • • AI scales deception — Fraudsters automate convincing scams, create synthetic identities, and overwhelm legacy controls, making AI an essential part of financial institutions’ anti-fraud solution.

    • “All-green” fraud is rising — The biggest losses often happen in correctly authenticated sessions, making them much harder to detect.

    • Behavior plus collaboration wins — Financial institutions need to shift from point-in-time checks to real-time, cross-channel behavioral signals and tighter inter-institution cooperation to spot coordinated campaigns and reduce friction without stalling growth.

How financial institutions are facing fraud in 2026 isn’t what it was like even two years ago. AI has industrialized deception, synthetic identities bypass traditional checks, and scams manipulate legitimate customers into moving their own money even as every security control shows green.

Today, financial institutions face a perfect storm, according to Michal Tresner, CEO of ThreatMark, and SaraĚýSeguin the DirectorĚýofĚýEnterprise Banking at Alloy. Indeed, they’re trying to manage attacks that scale automatically, identities that look real but aren’t, and victims who authenticate correctly before being convinced to hand over funds.

5 trends financial institutions need to understand in 2026

Looking at each of these five key challenges individually can offer both perspective and possible solutions.

1. The AI threat multiplier

Generative AI (GenAI) and large language models (LLMs) have fundamentally changed the fraud landscape. “AI is now the biggest threat facing financial institutions in 2026,” Tresner notes, adding that fraudsters are leveraging these technologies to create highly convincing content while automating attacks at unprecedented scale — a combination that overwhelms traditional security systems.

Seguin agrees and confirms this trend is . “Financial institutions are seeing a measurable increase in AI-enabled financial crimes, while consumers increasingly expect banks to deploy AI-based security in response,” she explains. The reality is stark: AI has become an essential tool for both fraudsters and those fighting against them.

2. The onboarding dilemma

In another area, the account opening process represents a critical vulnerability. Seguin points to rising first-party fraud and scams as particularly challenging because perpetrators often appear indistinguishable from legitimate customers going through the onboarding process. “A person may open an account with seemingly normal intentions — direct deposit or everyday banking — only to later engage in fraudulent activity,” she explains.

Onboarding is where institutions have the least certainty about either the authenticity of the identity or the legitimacy of the intent.

Tresner identifies a related threat: Synthetic identities. “Rather than stealing real identities, fraudsters now generate convincing fake ones, complete with realistic identity documents and even AI-generated images or video,” he says, noting that these synthetic identity accounts are exploding and frequently serve as infrastructure for moving stolen funds.

The common thread is that onboarding is where institutions have the least certainty about either the authenticity of the identity or the legitimacy of the intent.

3. Authentication under siege

Similarly, and even as financial institutions work to strengthen onboarding controls, account takeover remains a persistent threat. Fraudsters are now using AI to bypass authentication mechanisms at scale, making previously reliable security gates less trustworthy, Tresner explains. “Successful authentication can no longer serve as a definitive indicator of safety.”

Indeed, a properly authenticated session may still be the entry point for fraud, whether committed by an intruder or through a legitimate customer who is being manipulated.

4. The “all green” problem

Which brings us to another fraud scenario faced increasingly by financial institutions, and one that Tresner says may be 2026’s most operationally challenging issue — the fact that many scams don’t trigger traditional fraud controls. When the legitimate account holder initiates a transaction from their usual device and location using correct credentials, every standard check appears normal. The difference is the persuasion happening on the other side as fraudsters convince victims they’re interacting with trusted entities like banks, law enforcement, or romantic partners, and then direct them to transfer money.

Seguin notes that detecting these scenarios requires new approaches, such as identifying subtle behavioral signals like hesitation immediately before a money transfer. “Traditional device and credential checks won’t help when the customer is genuinely authenticated but acting under manipulation,” she explains.

5. Fraud as an industrial operation

Tresner emphasizes that modern fraud is not a series of isolated events but a coordinated, multi-step operation. Campaigns typically begin with establishing or compromising mule accounts, then deploying automated phishing kits to harvest personal data.

Younger users represent a growing target due to their online activity and platform usage, and the emergence of human trafficking-linked fraud operations has worsened this problem.

Not surprisingly, younger users represent a growing target due to their online activity and platform usage, Seguin says, adding that the emergence of human trafficking-linked fraud operations, including sextortion and overseas scam compounds, has worsened this problem.

What works in 2026

Tresner’s core recommendation for fraud investigators in financial institutions is for them to shift their focus from static, point-in-time checks to behavior-based detection. “Behavior profiling and analytics across channels can identify sophisticated actors and manipulation patterns invisible in single transactions or logins,” he explains, stressing that real-time cooperation among financial institutions is critical because fraudsters collaborate, and isolated defenses are insufficient.

Further, Seguin reframes fraud prevention as a growth enabler. “Effective risk controls allow institutions to launch products faster, set higher transaction limits with confidence, and avoid overly restrictive policies driven by fraud concerns,” she notes. Indeed, modern fraud defense isn’t just about reducing losses but about enabling safe expansion.

The 2026 fraud landscape presents compounding challenges: AI-driven scale and realism, onboarding uncertainty from synthetic identities and hidden intent, weakening authentication boundaries, scams that produce legitimate-looking transactions, and industrialized fraud operations that can span channels and institutions. Success in this area requires financial institutions to treat fraud as a behavioral, multi-channel, collaborative challenge because that’s exactly how their adversaries are operating.

You can learn more about the many challenges facing financial institutions today here

Key insights:

• • • Sextortion has evolved into a global industry — This crime is being fueled by organized crime networks and human trafficking.

    • Victims exist on both sides— Often, vulnerable workers, who operate as forced labor in scam compounds abroad, are as much the victims as those people being scammed online and extorted for financial gain.

    • Digital literacy and cross-border cooperation are strong tools — Governments and law enforcement need to better educate the public about these scams and seek better collaboration to prevent exploitation and to dismantle organized crime networks.

A 17-year-old Michigan high school student after inadvertently sharing explicit photos with a Nigerian sextortion scammer after the scammer posed as a teenage girl on a fraudulent Instagram account. Also, a 16-year-old Kentucky high school student after he was blackmailed with an AI-generated nude image.

Sadly, these two families are victims of the more than 100,000 sextortion reports filed with the National Center for Missing and Exploited Children (NCMEC) since 2020, many now involving AI-generated imagery. These reports are part of the larger increase in , which typically targets males ages 14 to 17 and which has been on the rise since 2020. These tragic cases are part of a vast network of scams that stretches from the to criminal compounds in Asia and Africa.

Sextortion in the modern age

The FBI defines sextortion as a criminal act in which an offender blackmails a victim for payment under the threat of releasing sexually explicit material, such as a photo or video. The material may have been solicited through a romance scam or may be the product of generative AI (GenAI). Sextortion is the latest trend in a series of scams that generate billions of dollars for international criminal syndicates on the backs of forced labor in parts of the world with unstable governance and oversight. An average 800 CyberTipline reports submitted to NCMEC from 2022 to 2023 related to the sextortion of minors.

NCMEC notes that victims of sextortion scams to the CyberTipline and make use of the . Take It Down allows for anonymous requests to remove explicit images from participating platforms and social media companies. encourages changing passwords after scam activity and not responding to any requests for payment, even if threats are made.

Organized crime syndicates and cyber-scams

are the “definitive market leaders” in cyber-enabled fraud and online scams, which have been rapidly expanding since the COVID-19 pandemic, according to the United Nations’ Office on Drugs and Crime. In areas of Asia with weak governance, scam centers and fraud gangs run sophisticated operations that often front as industrial parks or casinos and hotels. and coerced into defrauding other victims online. The trafficked individuals often are lured with false promises of high-paying jobs and the ability to maximize their language skills.

Broad enforcement efforts have been relatively ineffective as scamming operations simply move within the country or offshore.

Once there, victims are forced into labor to commit financial fraud usually by enticing smartphone users to invest in cryptocurrency scams or engaging in sextortion (which sometimes includes forced sex trafficking to produce sexual content). It is unclear if teenagers are being targeted explicitly or if they are inadvertently targeted through broader, population-wide cyber-scams.

The Myanmar town of Laukkaing (also spelled Laukkai), the capital city of the Kokang Self-Administered Zone is considered the engine-room of forced labor scamming. In Myanmar’s Kokang region, have turned from narcotics to online scamming, operating casinos, and scam compounds possibly because these crimes are more lucrative and easier to operate at scale.

In October 2023, a deadly crackdown at Myanmar’s Crouching Tiger Villa (referred to as the 1020 Incident) was the beginning of the crumbling of mafia-led control in Laukkaing. The Chinese government launched coordinated attacks, which resulted in . The leader of the Ming family (which operated Crouching Tiger Villa) took his own life after being captured, but of his extended family with ties to organized crime and illegal activities in Myanmar were sentenced in Chinese courts in September 2025, including 11 who were sentenced to death.

An estimated US $1.4 billion was generated by the Ming family over 10 years through telecommunications fraud, illegal casinos, drug trafficking, and prostitution.

Inside offshore scam compounds

Beyond Southeast Asia, forced-scam operations have grown rapidly across the Mekong region. TheĚý, funded in part by ¶¶ŇőłÉÄę, notes their study of CyberTipline reports and IP addresses point to a strong presence of scam compounds in Myanmar and Cambodia.

The financial impact of scam compounds is no small factor — ruling elites in these countries have a financial motivation to look the other way because of its high profitability. The in Cambodia are more than US $12.5 billion annually, or about half of the country’s formal GDP. Across Mekong countries (China, Myanmar, Laos, Thailand, Cambodia, and Vietnam), cyber-scam returns generate an estimated US $43.8 billion annually.

The financial impact of scam compounds is no small factor — ruling elites in these countries have a financial motivation to look the other way because of its high profitability.

Broad enforcement efforts have been relatively ineffective as scamming operations simply move within the country or offshore, and there are reports that these complex money laundering operations help move funds into the formal economy of countries with weak governance.

Despite the challenges in enforcement, some high-profile enforcement cases have helped to generate international coordination against cyber-scams and sextortion. A California teen’s death by suicide resulting from sextortion led to three years later. Interpol’s (July and August 2025) resulted in 260 arrests and more than 1,200 electronic device seizures in 14 African countries. The Association of Southeast Asian Nations (ASEAN) announced that as the main regional security concern last month. Domestically, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued sanctions on nine targets involved in scam operations in , and against (who is also associated with online scam centers).

Digital literacy as a solution

To truly begin to crack scam networks that operate in parts of the world with weak governance, of their citizens and support stronger cross-border investigation strategies. Stronger anti-money laundering frameworks can disrupt scam compounds more effectively than sting operations that just force the scam operation to move elsewhere.

It is critical that digital literacy is emphasized for online users who fall prey to sextortion and among job seekers lured into forced labor in scam compounds by fraudulent job advertisements. Cross-border collaboration among authorities, along with stronger enforcement and shared digital literacy, are the best defenses against this evolving threat.

You can find out more about our coverage of human trafficking, child exploitation, and forced labor at our Human Rights Crimes Resource Center here

Key insights:

• • • Old laundering patterns have modern wrappers— Nefarious actors now cooperate to move value through mirror-trade commodity flows and sometimes crypto, blending legal transactions with illicit proceeds.

    • FinTech expands laundering options— Peer-to-peer apps, reloadable cards, kiosks, and virtual assets allow for the execution of many small conversion transactions that break up funds and blur clean-to-dirty movement.

    • Fraud scales cheaply in an AI era— As cash use drops, scams and extortion become lower-risk and easier to industrialize — sometimes through forced-labor scam operations — making verification and policy adaptation urgent.

When incentives align, strangers can become business partners. In the 21st century, traditional finance, banking, and cash payments have been disrupted by a watershed of technological advances for which we are all unprepared. This time of crisis and opportunity has created an unexpected alliance between FinTech firms and traditional banking institutions.

To fight financial crime, however, it is important to deal with the ever-evolving ways for currency to change forms and change hands across vast distances. This new way of moving money mirrors ancient systems of debt ledgers & interpersonal trust, often known as Hawala or Fei Chien. Criminals continue to innovate with both methods, creating unsettling partnerships.

The cartel-business partnership

Cartels, underground banking networks, and legitimate businesses now collaborate — sometimes unwittingly — to launder money by moving value through mirror-trade commodity flows and cryptocurrency, merging legal trade with illegal profits. Near-cash-style FinTech methods — such as peer-to-peer apps, reloadable cards, kiosks, and virtual assets — can expand laundering opportunities by enabling numerous small conversion transactions that fragment funds and obscure the movement of illicit money. As cash use declines, fraud, including scams and extortion (sometimes executed through forced-labor scam operations) becomes less risky and easier to scale in the AI era, underscoring the urgent need for verification and policy adaptation.

The flow of illicit cash also extends to digital assets. Some of the cash money that gets stuffed into bitcoin ATM-style kiosks is from the drug trade. Indeed, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued an alert on this topic as well and, while the two schemes seem distinct, we can speculate that some of the resulting Bitcoin, crypto, or other virtual assets went to underground bankers facilitating a mirror trade for a countryman.

What is old is new again

In the world of finance, the dawning of a new era of digital, on-demand, borderless transactions provides access to an exciting frontier of possibility. New coins, new blockchain tokenization uses, and new FinTech tools with cool names are all rising and falling faster than the price of bitcoin.

The players in this intersection have figured out that trade is profitable, and legal trade leading to illicit substance trade is even more profitable. Underground shipping, sanctions evasion, and dark web services for money laundering are all profitable by themselves, and when combined, they represent an illicit economic blitzkrieg.

Cartels, underground banking networks, and legitimate businesses now collaborate — sometimes unwittingly — to launder money by moving value through mirror-trade commodity flows and cryptocurrency.

Crypto is the new Hawala or Fei Chien because, with no bank or government involved, people can keep common copies of a ledger instead of relying on a hawaladar or Chinese underground banker to keep records. Virtual assets could facilitate the currency side of mirror trades, refilling a person’s coffers via digital transfer which can then be moved to an exchange and on to a local bank.

Commodities are the new cash because mirror trades are physically settled in commodities. For example, investment in source chemicals for drugs, negotiated at a discount, helps expand the illicit cartel business. Similarly, one-off items can be used for large-cash replacement transactions.

FinTech is the new money service business (MSB). We know that they are regulated the same but often serve different market segments, and many now exchange government fiat currency for one or more forms of cryptocurrency. Money laundering thrives on breaking up funds into smaller amounts to avoid reporting; therefore, a multitude of near-cash options like peer-to-peer payment apps, reloadable cards, and virtual assets help the launderer with this problem.

One might imagine that lower-tier street dealers could have several peer-to-peer payment app accounts for ease of use, because although the criminal is running an illicit business, it’s a business, nonetheless. Industry experts call these small payments conversion transactions because they usually come from a clean, legitimate payroll source but are converted to dirty funds when spent on an illicit substance or activity.

Fraud is low risk and AI fuels the fire

In this rapid-fire digital transaction world, fraud is the new mugging, complete with racketeering and slave labor farms. The profit margin on physical intimidation has gone down because people use cash less often, and many seldom carry it at all.

Due to digital innovation, communication technology, and AI, however, the barrier to entry for fraudulent theft, extortion, or scamming has gone down dramatically as well. Presumably, the margins are high because the ability to fraudulently communicate has become exponentially enabled by these tech advances. Fraud and scams are ubiquitous to the point of impeding legitimate business from communicating with customers effectively.

The players in this intersection have figured out that trade is profitable, and legal trade leading to illicit substance trade is even more profitable.

Further, slave labor has reared its ugly head in yet another strange intersection among these many things. Fraudsters in Southeast Asia build warehouses filled with tech and then force local people to operate scams and fraud schemes at scale. Aggregated funds from these efforts are sometimes moved via commodity or artifact, but often these funds are gathered from kiosks or peer-to-peer apps and then moved through cryptocurrency transactions until they become increasingly arduous to track.

Looking to the new dawn

It seems every few minutes brings us a new tool, a new opportunity, a new way to move money, and a new way to get scammed out of it all. This expanding capability is fueled by GenAI and even more advanced forms of AI. Business expands, productivity expands, and resources are consumed faster. Fraud is enabled, scaled, and seems to hang in the very air.

With the proliferation of digital, borderless, and AI-enabled everything, the human touch is more important than ever. Business owners note that requests for memorabilia and other tokens of physical value continue to rise. Cash will not go away, but its share of transactions is already diminished with the advent of crypto, new intersections in commodity exchange, and other person-to-person ways to settle accounts.

For the financial institutions, government agencies, and fintech firms that populate this world, creating informed best-practices and sensible policy documents is critical at this phase of innovation. Without a proactive approach we cannot hope to stay ahead of criminals and keep legitimate markets secure.

You can find out more about how organizations are using new methods to detect and prevent financial fraud here

Key insights:

• • • Blockchain’s transparency is a double-edged sword— While criminals use crypto for illicit activities, the permanent and public nature of the blockchain ledger creates an undeniable trail, making it a powerful tool for law enforcement to track and seize illicit funds.

    • The rise of crypto forensics— A growing industry of specialized firms and investigators is leveraging blockchain’s inherent design to unravel complex financial crimes, demonstrating that “±ô´Ç˛őłŮ” crypto funds can often be recovered.

    • An evolving battlefield— Despite the ongoing challenges posed by tools like mixers and privacy coins, blockchain technology is fundamentally shifting how financial crime is fought, turning the very system criminals exploit into the means of their capture.

Cryptocurrencies and other digital assets are used by criminals, which is great for catching them. Indeed, the biggest criticism of crypto since its inception has been its criminal use, which was estimated to be almost half of all activity by the end of 2017. In the past three months alone, asset seizures and forfeitures of more than $22 billion in crypto have been made by authorities in the United Kingdom, the United States, and their international partners.

These historic interceptions of illicit funds prove that the fundamental architecture of blockchain — the digital ledger that underpins most virtual transactions — makes it the perfect tool for catching criminals, validating the hypothesis of Satoshi Nakamoto, the presumed pseudonym of the person or persons who developed bitcoin, that fraud could be prevented through intentional system design.

While criminals assumed they could optimize their illegal activities using crypto to obfuscate fund flows, the blockchain ledger’s immutability has created a niche for financial crime investigators seeking to unravel these cases. Companies like Chainalysis, Elliptic, and TRM Labs have become synonymous with these investigations, joined by a growing network of smaller firms that are democratizing crypto investigations, combating terrorist financing and online child abuse. Ultimately working to secure seized assets and prevent further harm. By all measures, the ecosystem is expanding rapidly.

Every crypto transaction creates a permanent trail that allows investigators to catch criminals even years after their crimes. This is how, a digital exchange hack in 2016 that resulted in the theft of 120,000 Bitcoin worth $72 million (at the time) and was chronicled in the Netflix documentary was wrapped up years later with the seizure of $4.5 billion in crypto and the arrest of the two alleged perpetrators in 2022. Law enforcement may not move as fast as crypto, but if the whale is big enough, they will catch it.

Indeed, the scale of cryptocurrency-enabled crime threatens Western economic stability. The FBI received 149,686 crypto-fraud complaints in 2024, totaling $9.3 billion in losses, likely significantly lower than the true figure. More than 100,000 people are trafficked and forced to operate scams from compounds in Cambodia and Myanmar. The Prince Holding Group, a transnational criminal organization headed by Chen Zhi, generated , approximately $10.95 billion annually.

Financial crime as economic warfare

These are just headlines. Further research in the Netherlands shows that only 11.8% of fraud victims actually report being victimized. While many dismiss fraud and blame victims, crypto-related fraud is becoming economic warfare systematically draining wealth from Western economies while enslaving hundreds of thousands in forced labor camps across the Global South. With potentially $80 billion lost annually to crypto fraud, the impact extends beyond the 1.14% of the US federal budget it represents. This illicit outflow causes loss of productive capital, tax base erosion, and reduced economic activity.

Yet the technology accused of enabling this new generation of fraud simultaneously provides the tools to detect and combat these criminal organizations more successfully than any financial crime fighting technology in history. The Chen Zhi case, easily the largest asset forfeiture in US history at around $15 billion, demonstrates this perfectly.

Every crypto transaction creates a permanent trail that allows investigators to catch criminals even years after their crimes.

This is why I’ve spent the last four years studying the crypto ATM industry. While most financial crime professionals saw a problematic service in a problematic industry, I saw a massive dataset of criminal activity that could predict other illicit activity beyond crypto ATMs. This dataset helped identify terrorist financiers, vendors of child sexual abuse material (CSAM), and countless scams and frauds. Layer data-rich sources like crypto ATMs with blockchain data, and a good investigator can achieve remarkable results.

Modern blockchain analytics leverage the features Nakamoto designed for trust and verification. Immutability makes evidence tampering impossible and investigations public; and verifiability allows investigators to validate every step of a criminal’s crypto trail. Consensus mechanisms create a distributed jury of millions, validating the evidence chain further. These features enabled authorities to map the , revealing 76,000 fake social media accounts operated from facilities using 1,250 phones across 10 Cambodian compounds, and tie it to $15 billion in bitcoin.

The same technology facilitating billions of dollars in pig butchering scams annually enables law enforcement to catch the transnational criminals and recover funds. Traditional financial crimes disappear into offshore accounts and shell companies, often leaving investigators blind. However, as anyone in blockchain forensics knows, Locard’s Exchange Principle remains true: Every contact leaves a trace. Blockchain’s public ledger means every suspicious transaction leaves a permanent clue.

Nakamoto’s vision of “electronic transactions without relying on trust” inadvertently created a system for establishing criminal culpability. The blockchain’s public nature convinced criminals they could hide in plain sight, but Nakamoto saw that participants would be deterred from fraud by this transparency. The naive assumption that users had nothing to hide if doing nothing wrong quickly revealed plenty were doing wrong. Still, the system proved fit for purpose once tools were built to catch bad actors. Nakamoto’s white paper’s emphasis on preventing double-spending through public verification created a framework in which crime-spending leaves permanent evidence. All a good investigator needs is time.

The rise of crypto forensics

As crypto advances, tools like bridges, mixers, and privacy coins pose constant challenges for investigators, but claiming the money is gone when crypto is involved is simply false. As blockchain forensics advances, criminals face an uncomfortable truth: They’ve been conducting operations on a permanent, public, immutable ledger. Their only protection is time and cryptographic puzzles that an entire industry is working to unravel.

While some has been diligent in pointing out some of the challenges in the industry and some of what’s been missed, there are a lot more illicit fraud cases that never see the light of day because of what has been prevented by blockchain forensics. And while it may not be perfect, the fact that there is an industry working to build a safer financial system than what has gone before is commendable, and the accountability that public ledgers have enabled is energizing for those that must police it.

Unfortunately, the $15 billion Chen Zhi seizure isn’t the end but the beginning. With at least $64 billion stolen annually, these criminals have little incentive to stop. While some scam compounds have been dismantled, reports indicate they’re simply being relocated.

Nevertheless, blockchain is setting a new paradigm in financial crime, one in which the technology enabling crime will eventually become the weapon that defeats it.

You can learn more about financial crimes and other regulatory issues involving cryptocurrencies here

Key insights:

• • • Fraud prevention presents systems challenges — In the current advanced tech-enabled environment, AI-driven tools in the public sphere need human coordination and oversight to be employed properly.

    • The intangible cost of fraud is public trust — When public programs that are designed to support vulnerable populations fall victim to exploitation, confidence in the ability of government-administered programs falters.

    • The full scope of fraud is unknown — Many improper payments from government programs aren’t criminal. It’s that we need better data, clearer definitions, and a stronger understanding around what fraud truly is.

As public programs and the scale of fraud become the subject of national and state political discourse, more state governments and public sector agencies are evaluating the potential of data analytics and AI tools to curb fraud. As these institutions are realizing, effective fraud prevention is easier said than done, and investment in new detection tools will fail to keep pace with fraud if they don’t address structural, cultural, and coordination challenges.

Early fraud detection

Early detection of fraudulent activity, aided by AI tools and systems, may still be the most effective way to deter future problems. For example, California Community Colleges, the largest higher education system in the United States, currently serves more than two million students and has in two-thirds of its institutions in order to detect fake students. With open access for enrollment, the system is a magnet for fake students who apply, enroll, and fill seats in virtual classes that real students should be occupying, while fraudulently collecting federal and state student aid.

In 2024, it was estimated that nearly one-third (31%) of financial aid applicants at California Community Colleges were fraudulent, resulting in approximately $13 million in state and federal aid dollars being disbursed to fake students.

California Community Colleges employed a three-phased approach seeks to catch fraudsters who may slip through at the time of application, when they register for courses, and when they apply for financial aid. The system engaged in cross-agency collaboration with the California Department of Motor Vehicles and deployed a mobile ID system to authenticate student identity. Further, its data analytics looked at factors such as students’ IP addresses, time zones, age, and contact information to flag those patterns that could indicate a fake applicant. An AI tool analyzed course registration patterns, as well, identifying whether applicants have illogical or unusual patterns in the courses they are taking.

Then, system educators integrated into their virtual courses early on, requiring students to submit an introductory video, for example. This allows educators to cut non-participating students (presumed to be fake) before financial aid is disbursed.

These early detection tools, paired with human judgment, showed how a proactive approach can stop fraud before funds are lost.

Gaming government systems

While fake students illustrate small-scale exploitation in California, provider fraud is where large dollar amounts and case complexity arise. When fraudsters illegally obtain Medicaid funds for services they never rendered, for example, individuals in need of services suffer.

Minnesota’s now-shuttered Housing Stabilization Services program intended to help move individuals who were experiencing housing insecurity into transitional and then permanent housing solutions. According to a , the well-intentioned program enriched sophisticated fraudsters, who formed business entities and falsified employee hours, reimbursement claims, and patient identities — even going so far as to manufacture false case notes as a precaution against their records ever being audited. Not surprisingly, illegally gained reimbursements were used to fund high living expenses, luxury shopping, and cars.

Similar fraudulent providers have been charged by the U.S. Attorney’s Office for the Northern District of Texas as part of . Four individuals fraudulently billed around $20 million to federally funded programs and other insurers.

In another case that showed that fraudsters sometimes can come from inside the house, a group of were ruled against by a federal judge in a whistleblower lawsuit alleging that four insurers and six health systems routinely, improperly billed the state’s Medicaid program. Part of the reason for the judgment was because the disputed claims were still paid by the Indiana Medicaid program, despite it being aware of alleged issues. In this case, oversight gaps and a consistent pattern of not flagging improper payments revealed a structural weakness within the state office.

Different approaches for data analytics

Some agencies are employing different methods to leverage advanced tech to help in the fight against fraud. For example, the Louisiana Department of Health is using AI to scrutinize Medicaid recipients and their eligibility. A developed at the University of Louisiana at Lafayette will allow the Louisiana Department of Health to share data with the state’s Office of Motor Vehicles. By analyzing whether individuals have duplicate licenses in other states, their eligibility to receive benefits in Louisiana may be rescinded.

Focusing on a different tack and target, the Center for Medicaid and Medicare will deploy a six-year pilot program of the across six states: New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington. The pilot program will specifically target low-value services with little to no clinical, evidence-based benefits and will expedite review of those services that are at a higher risk for provider fraud, waste, or abuse. This heightened scrutiny of providers seeking Medicaid reimbursement is in alignment with recommendations from the around program integrity.

These varying approaches raise a difficult question: Is it better to risk inefficiency by targeting providers, or it better to risk inequity by targeting recipients?

Understanding the measures of fraud, waste, and abuse

The total cost of fraud is difficult to calculate, as there are countless incidents of fraudulent reimbursement requests, overbilling, or unnecessary medical treatment that cannot be counted. Two data measures that we have to understand to truly gauge the efficacy of public health systems’ financial health are the payment error rate and the dollars recovered through fraud controls.

are those payments that fail to meet statutory, regulatory, or administrative requirements. They may be for non-eligible services, be inappropriately or inaccurately coded, or may exceed program maximum amounts — but their common denominator is that they represent funds that were misspent or out of step with fund guidelines.

Improper payments are calculated and reported to Congress annually across all federal healthcare programs. The dollar recovery rate calculates the amount of inappropriate reimbursements recovered from fraudulent actors each year, usually through the pursuit of civil or criminal damages. However, it’s important to remember that not all improper payments are lost to fraud. For example, within the Medicaid program were most often tied to missing appropriate documentation for individuals receiving care.

Understanding these definitions determines how we measure success, design large government systems, and allocate enforcement dollars across states. Such preventative measures, especially now aided by AI and other advanced tech, will help the next generation of fraud detection professionals who will come to rely on the tools and platforms that we design now.

And as more state governments and public sector agencies seek to leverage AI tools and platforms, they would be wise to focus on efforts that collect and analyze real-time participant data and incorporate ethical AI oversight, while balancing an investment in prevention as well as prosecution.

You can learn more about the challenges that government agencies face today here

Key insights:

• • • 4 pillars of surveillance — Casinos operate under a comprehensive BSA and Title 31 anti-money laundering framework, anchored by four pillars that together create a surveillance network to detect and deter illicit activity.

    • Significant gap in enforcement — Despite a massive surge in SAR filings, enforcement actions were virtually nonexistent, revealing a significant enforcement gap that undermines deterrence.

    • Balancing regulatory rules and risk — Effective CTR and SAR practices are both a regulatory obligation and a risk signal: Strong, timely, accurate reporting and a compliance-first culture help avoid penalties and protect reputation, while weak programs invite costly, rigorous enforcement.

Casino operators face increasingly rigorous anti-money laundering (AML) obligations under federal banking secrecy laws that require extensive reporting, customer monitoring, and record maintenance systems. These regulatory mandates, enforced by the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN), establish four core pillars of compliance: i) currency transaction reporting for cash activities exceeding $10,000; ii) suspicious activity reporting for potentially illicit behavior; iii) customer identification protocols; and iv) comprehensive recordkeeping standards.

While recent enforcement data reveals significant gaps between the volume of filed reports and actual regulatory actions, casinos must prioritize robust AML programs to avoid substantial penalties and reputational damage.

Under United States federal law, casinos operate within a stringent AML framework governed by Title 31 of the U.S. Code, commonly known as the Bank Secrecy Act (BSA). FinCEN serves as the primary regulator, enforcing comprehensive requirements designed to prevent casinos from becoming conduits for financial crimes.

The 4 pillars of casino AML compliance

1. Currency Transaction Reports (CTRs)— These reports form the foundation of casino reporting obligations. When a customer’s combined cash transactions exceed $10,000 in a single day, casinos must electronically file a detailed report within 15 calendar days. These reports capture essential customer information, such as name, address, Social Security number (SSN), and other identification details.

2. Suspicious Activity Reports (SARs)— These reports, filed with FinCEN, target potentially illicit behavior. For transactions of $5,000 or more that raise red flags, casinos must file comprehensive SARs within 30 days. Crucially, customers are never informed of these confidential reports.

3. Customer identification and due diligence— These requirements ensure casinos know who they’re serving during critical transactions. While not as extensive as traditional banking’s know-your-customer protocols, casinos must collect and verify customer information — name, birth date, address, and SSN — whenever filing CTRs or SARs or establishing certain accounts. This extends to monitoring gambling patterns for suspicious patterns.

4. Recordkeeping requirements— Rules around keeping records create the documentation foundation for compliance. Casinos must maintain all CTRs, SARs, supporting documentation, account records, negotiable instrument logs, and gaming activity records for five years in organized, accessible formats. Without robust recordkeeping systems, casinos risk missing reportable transactions or a failure to document suspicious activity.

Together, these four interconnected requirements create a comprehensive surveillance network, ensuring casinos serve as vigilant gatekeepers against money laundering while maintaining the integrity of their operations and supporting law enforcement investigations.

Public enforcement

SARs and CTRs are the backbone of Title 31 enforcement. Regulators use them to assess casino activity and compliance — and when reporting lapses, enforcement follows. Casinos that neglect filings or run weak AML programs face fines and mandated overhauls, while those with strong reporting and internal controls can largely avoid penalties.

The stark disparity between SAR filings and enforcement actions reveals a troubling enforcement gap.Ěý, financial institutions filed tens of thousands of SARs annually, yet only were completed during this entire period. This represents an enforcement rate that is virtually non-existant.

This enforcement deficit becomes even more striking when viewed historically.ĚýAs recently as 2000, fewer than 20 SARs were filed annually. Despite this dramatic 1,000-fold increase in reporting over two decades, enforcement actions have remained stagnant.

Indeed, the numbers tell a clear story: The current system generates massive volumes of reports but delivers minimal accountability. This, in turn, undermines the entire purpose of the SARs system and calls into question whether these reporting requirements are achieving their intended deterrent effect.

Enforcement revived in 2024, and the AML Act of 2020 also has raised expectations and risks. All casinos — large or small — must treat BSA compliance as core duty. That means casinos need to file accurate, timely CTRs; investigate and report suspicious activity via SARs; and then act on those insights to mitigate risk. Recent cases — from suppressed SARs to absent AML programs — show that failures are costly and reputationally damaging.

SARs and CTRs are the backbone of Title 31 enforcement. Regulators use them to assess casino activity and compliance — and when reporting lapses, enforcement follows.

Casinos have incurred multi-million-dollar fines for serious compliance violations, including deliberately failing to maintain AML programs, ignoring BSA requirements, and neglecting to report suspicious transactions. Additional penalties have been imposed for persistent AML deficiencies and the use of misleading compliance policies. Many of these violations occurred within some casinos over multiple years, demonstrating systemic, long-term compliance failures rather than isolated incidents.

These patterns reveal that the problems extend far beyond simple administrative mistakes. Instead, they represent fundamental breakdowns in comprehensive compliance programs — failures that can only be detected and addressed through extensive data analysis using information that must come directly from the casinos themselves.

Effective filings of SARs and CTRs serve as a double-edged sword: They not only fulfill a critical regulatory obligation but also act as a barometer of a casino’s commitment to compliance. When done well, these filings protect the institution from potential sanctions and reputational damage. Conversely, poor execution can lead to severe penalties and, more alarmingly, enable illicit activities.

The requirements are straightforward. Casino operators need to prioritize compliance investments, thoroughly know their customers, submit accurate reports, and cultivate a culture that encourages the identification of suspicious transactions. The consequences of non-compliance are steep, both financially and in terms of facilitating crime.

As FinCEN underscores, a robust compliance framework is essential to maintaining the integrity of the financial system. By embracing this responsibility, casinos can establish a strong foundation for regulatory adherence — and those that fail to do so can expect rigorous enforcement action.

You can find out more about how businesses, like casinos, are managing the threat of fraud here

Key insights:

• • • Auditors are critical in initial financial crime detectionĚý— Professionals responsible for auditing transactions are the primary line of defense in identifying suspicious activity, such as irregular deposits or transactions inconsistent with an account’s purpose.

    • CI-FIRST enhances SAR effectiveness and collaborationĚý— The new CI-FIRST initiative by IRS Criminal Investigation marks a significant shift by providing financial institutions with feedback on SARs, fostering a more transparent and collaborative partnership with federal agencies.

    • Financial crimes are evolving, requiring improved SAR qualityĚý— Recent trends show a troubling rise in sophisticated financial crimes like account takeover fraud, elder exploitation, and resilient check fraud, underscoring the urgent need for enhanced clarity and improved quality in SARs preparation.

The financial professionals responsible for auditing transactions are integral to the detection of financial crimes. These individuals serve as the initial point of contact for identifying transactions that may be cause for concern, including patterns such as irregular recurring deposits or activity inconsistent with the account’s intended purpose.

Upon detection of potentially suspicious financial activity, a bank initiates a thorough internal review to assess whether the circumstances warrant the submission of a Suspicious Activity Report (SAR). If the criteria for suspicion are met, the electronically with the Financial Crimes Enforcement Network (FinCEN) within 30 to 60 days. The report is housed in a secure government database, accessible to authorized agencies such as the FBI, DEA, and IRS for further analysis. While this reporting mechanism plays a vital role in combating financial crime, it is not without limitations.

A significant challenge of the SARs system historically has been the absence of feedback provided reporting to banks regarding the outcomes of their submissions, resulting in a unilateral flow of information. To address this issue, the IRS Criminal Investigation launched a new initiative known as Feedback in Response to Strategic Threats (CI-FIRST).

The CI-FIRST initiative

In early 2025, the initiative was introduced, aiming to establish a transparent and effective partnership between federal agencies and private financial institutions. This program enhances transparency around SARs filings, providing financial institutions with clearer insight into how their submitted SARs are utilized in federal investigations. By doing so, it marks a significant shift in the way SARs are handled.

CI-FIRST fosters a more collaborative relationship between financial institutions and federal investigators, allowing for direct feedback and communication. This open dialogue could lead to more efficient and effective SARs processes. Moreover, the program has the potential to be a blueprint for other agencies, demonstrating a successful model for improving data quality and facilitating more robust information sharing. The success of CI-FIRST could have far-reaching implications for the way financial crimes are investigated.

Within this fraud landscape, several troubling patterns emerged that underscore the sophistication and persistence of financial criminals. For example, check fraud has demonstrated resilience despite the digital age, with financial institutions filing 682,276 SARs related to this traditional form of fraud, representing a notable uptick from previous periods.

CI-FIRST fosters a more collaborative relationship between financial institutions and federal investigators, allowing for direct feedback and communication.

Even more alarming was the dramatic 36% surge in account takeover fraud, a cybercrime that reflects criminals’ increasing ability to exploit digital vulnerabilities and compromise customer accounts. This surge resulted in nearly 178,000 reports, underscoring how criminals are adapting their methods to target online banking and other digital financial services.

The SARs data also revealed that identity theft remained a persistent threat, comprising more than one-quarter of all fraud-related SARs filed in 2024. This substantial proportion demonstrates how personal information breaches continue to fuel criminal enterprises across multiple fraud categories. Perhaps most concerning from a societal perspective was nearly 10% increase in elder financial exploitation cases compared to 2023, with 171,233 SARs filed specifically addressing crimes against vulnerable older adults. This trend reflects not only the increasing targeting of seniors but also potentially improved recognition and reporting of these crimes by financial institutions.

Financial institutions face mounting challenges

These comprehensive trends collectively illustrate the mounting challenges facing financial institutions, law enforcement, and regulatory bodies in their efforts to prevent, detect, and prosecute financial crimes. The sheer volume and diversity of criminal activity captured in these SAR statistics demonstrate that traditional approaches to combating financial crime require enhancement and modernization.

It is within this context that the CI-FIRST initiative emerges as a particularly relevant and timely response. One of the initiative’s most significant contributions lies in its commitment to providing enhanced clarity and guidance on the preparation of required SARs reports.

This improvement in clarity serves multiple critical functions in the financial crime prevention ecosystem. For example, by establishing clearer standards and expectations for SAR preparation, the initiative aims to improve the quality and consistency of the information provided to law enforcement agencies and regulatory bodies.

The sheer volume and diversity of criminal activity captured in these SAR statistics demonstrate that traditional approaches to combating financial crime require enhancement and modernization.

Further, the enhanced clarity in SARs preparation has direct implications for the speed and effectiveness of subsequent law enforcement actions. When SARs contain more precise, complete, and well-organized information, investigators can more quickly identify patterns, establish connections between cases, and build stronger foundations for legal action. This improved information quality significantly accelerates the process of obtaining subpoenas, as law enforcement officials can present more compelling and comprehensive evidence to judicial authorities when requesting these critical investigative tools.

Finally, the enhanced SARs preparation standards contribute directly to more effective prosecutions of individuals engaged in financial crimes. Prosecutors rely heavily on the detailed information contained in SARs to build their cases, and when this information is clearer, more thorough, and better organized, it becomes significantly easier to demonstrate criminal intent, establish patterns of illicit behavior, and present compelling evidence to juries. This improvement in the foundational documentation makes it substantially more likely that prosecutions will be both accurate in targeting genuine criminal activity and successful in securing convictions.

The expediency gained through these improvements creates a virtuous cycle in financial crime prevention. Faster, more successful prosecutions serve as stronger deterrents to potential criminals while also providing more rapid justice for victims. Additionally, enhanced efficiency allows law enforcement resources to be deployed more effectively across a broader range of cases, potentially addressing the growing volume of financial crimes reflected in the 2024 SAR statistics.

You can find more of our coverage of SARs and related efforts to combat financial crimes here

Key insights:

• • • Coordinated investigations boost detection — The recent operation formed a fusion center in which data was shared and compared, enabling earlier and more effective identification of fraudulent patterns.

    • Advanced analytics uncover complex schemesĚý— Fraudsters allegedly used hundreds of shell companies to mask illicit activities, complicating detection, but analytics platforms leveraging third-party data help identify anomalies.

    • Multi-entity collaboration is essential — Broader cooperation and data sharing across entities increase the likelihood of timely detection and enforcement actions.

State and federal prosecutors recently charged more than 320 people for $14.6 billion in false claims in what is described as the largest coordinated takedown of healthcare fraud schemes in the history of the U.S. Department of Justice.

The key word here is coordinated. Traditionally, Medicare, Medicaid, private insurers, and other organizations have tended to investigate fraud in isolation. Each agency or carrier worked its own pipeline — reviewing claims, generating leads, and pursuing cases on its own.

Fraudsters, meanwhile, are more equal opportunity exploiters, often spreading their tentacles across numerous targets. This not only increases their total potential illicit gains, but it also reduces their detectable footprint within any single target. In schemes that sprawl across multiple targeted entities, even if the fraudulent activity is discovered, each target only sees a slice of the total picture.

This recent operation completely flipped that script. The organizations that were targeted for fraud formed a fusion center that shared and compared data. While each individual organization carries its own unique vulnerabilities, the more data that’s shared between more parties, the more likely that patterns can be identified or that perpetrators will hit a trip wire somewhere along the way in one of the targeted organizations and be detected.

The goal of such coordination is to spot fraud as early as possible, before it has a chance to permeate more deeply into each affected organization. Even with coordination, the challenge remains to detect sophisticated fraud before it balloons into multi-billion-dollar losses. The $14.6 billion figure likely reflects activity that went undiscovered for years.

Early detection is key

In many of these types of fraud schemes, there are massive numbers of dots to connect and threads to follow. In this recent takedown, fraudsters had allegedly set up hundreds of shell companies to mask their illicit transactions, which intentionally made it difficult to trace the fraud back through the shadow businesses to the individual perpetrators.

Advanced analytics platforms that leverage third-party data can help spot these suspicious patterns. And the more entities and more data that these platforms have to work with, the greater their ability to spot anomalies through analysis, such as:

• • • Risk scoring — Assigning fraud-specific risk ratings based on abnormal billing patterns, outlier service volumes and geographic spikes
    • Entity resolution — Linking providers, clinicians, and business owners to spot potential shell companies
    • Ownership mapping — Uncovering hidden relationships among entities registered in different states or countries

Yet, even with advanced analytics and other data sources, detecting fraud and piecing together the multitude of disparate leads that could potentially point back to the perpetrators is a daunting task. Further, the government agencies and private insurers involved both make extensive use of contractors, which, on the one hand, can add another layer of complexity, but at the same time, these contractor networks can also provide additional resources and data for spotting fraudulent patterns.

As the recent takedown demonstrates, it’s difficult for any single entity to handle this by themselves. For example, the alleged fraudsters in the recent takedown reportedly used entities spread across multiple countries. So, the wider the net is cast, the more likely it is to get better, faster results that can lead to enforcement actions.

Coordinating learnings to assist prevention

While it’s vital to analyze cases after they’re successfully concluded to better identify and correct weaknesses and vulnerabilities and to prevent fraud from recurring, it’s equally important for agencies and organizations to find out what went right and share best practices.

While one organization may fall victim to a fraud scheme, another organization may find that they managed to partially or completely deter the same scheme. By comparing notes along with data, organizations can see which policies, procedures, or technology solutions specifically either enabled or deterred the fraud.

Then, policies and procedures can be reshaped based on what other agencies or carriers are learning in real time as they deal with fraudsters. When organizations share datasets, a suspicious provider or transaction that is flagged by one organization can immediately trigger alerts across the coordinated agencies and carriers. Even if organizations have dissimilar systems or datasets, they can share best practices and adopt similar data taxonomies to make sharing of data easier.

Even if an organization isn’t part of a multi-agency task force, the principle holds: The more you break down silos — between departments, between payers, and between public and private sectors — the faster organizations will be able to spot patterns that might otherwise get missed, enabling earlier detection and faster action.

The extent and breadth of the recent takedown — from bogus wound-care supplies to illegal pill mills, fraudulent catheter claims, and more totaling billions of dollars — underscores how fraudsters will seek to exploit every vulnerability and loophole they can find. At the same time, the successfully coordinated crackdown demonstrates how collaboration, data sharing, and the right technologies can help organizations and agencies turn the tide.

You can find out more about the ongoing fight against medical fraud here

Key Insights:

• • • Regional collaboration and international partnerships are essential for combating transnational human trafficking, with Nigeria’s cooperation with neighboring countries and support from organizations like ICMPD are vital for cross-border intelligence sharing and victim protection.

    • A multidisciplinary approach to combatting human trafficking, like the one in Nigeria, results in the best approach for measurable success.

    • Prevention through education is crucial, as demonstrated by targeted school programs like STEAP that reach approximately 100,000 students across five Nigerian states to build awareness and resilience among vulnerable youth before exploitation occurs.

Human trafficking, along with many other cross-border crimes, is a highly complex issue, and it has been one of the fastest-growing, more lucrative shadow industries globally for trafficking syndicates. Owing to its multi-issue dimensions, human trafficking is a challenge to tackle head-on, but the Nigerian government has been showing success in numbers.

Since 2003, at least 25,550 victims of human trafficking and more than 2,050 survivors of violence have been rescued by Nigeria’s . The agency also secured a total of 755 convictions, highlighting its commitment to protecting vulnerable populations in the country and holding perpetrators accountable, including those acting across borders. Last year alone, NAPTIP investigated 698 cases, including 333 related to sex trafficking and 172 to labor trafficking.

Beyond what these numbers show, NAPTIP has become a model in Africa as a one-stop agency for all issues of human trafficking — ranging from case investigation, prosecuting offenders, raising awareness on the risks, and providing protection and assistance to victims and survivors. To date, NAPTIP has also been operating 14 shelters across its 34 regional offices across Nigeria, providing safe havens and comprehensive support services to 1,587 victims in the last year alone.

Multidisciplinary agency in Nigeria key for success

Nigeria signed the United Nations’ Convention Against Transnational Organized Crime and the Palermo Protocol in 2000. In 2003, its Parliament enacted the Trafficking in Persons (Prohibition) Law Enforcement and Administration Act (TIPPLEA), and NAPTIP was concurrently born.

As a multidisciplinary agency, NAPTIP works closely with other law enforcement agencies, as well as judiciary, civil society, and international partners to disrupt trafficking networks. Through legal reforms, victim support, increased enforcement, and grassroots-level advocacy, NAPTIP has focused on taking down trafficking networks that target vulnerable populations, especially children and youth.

Join us for a free online Webinar: World Day Against Trafficking in Persons to learn more about the complexities of human trafficking, the impact on victims, and effective strategies for prevention and intervention

In 2015 the TIPPLEA was re-configured into the Trafficking in Persons (Prohibition) Enforcement and Administration Act (TIPPEA) to tackle newly emerging trafficking trends, strengthen the law by removing the option for trafficking offenders to pay fines, and provide a benchmark for sentencing offenders via other laws. Since then, the , an international research and policy institute, has been a key supporter of NAPTIP’s operations with a focus on prevention, protection, and capacity development. Through its implementing role of European Union-funded project of the , ICMPD has been collaborating with NAPTIP and other in-country partners to:

• • • integrate human trafficking issues into the curricula of Basic and Senior Secondary Schools, as well as into the minimum standards of Colleges of Education in the country;
    • develop teacher’s guides and provide training of trainers for Colleges of Education; and
    • produce training curriculum for NAPTIP personnel and training manuals for the agency’s trainers.

By 2020, the partnership expanded across Nigeria’s neighbors in the region. Through a bilateral accord, NAPTIP collaborated with its Niger counterpart to deal with trafficking through joint operations, including public awareness campaigns and exchange of intelligence. With ICMPD’s support, this partnership has been providing support to victims of human trafficking in-country, and for the return of rescued Nigerian victims from its northern neighbor.

“ICMPD has been an ally in our counter-trafficking engagements in Nigeria,” says . “They have supported us in developing policy documents, in deepening our awareness-raising (especially in schools), and in various activities to protect and assist victims and survivors of trafficking. Above all, we are enjoying a lot of collaboration with some of our neighboring West African countries through their support.”

Awareness, education & collaboration with neighbors helps prevention

As in many other trans-national crimes, human trafficking preys on the vulnerable, especially on young people. Hence, one of the flagship projects of ICMPD’s support to NAPTIP is the , funded by the Government of the Netherlands. It raises awareness among school-age children and their communities and fosters collaboration with civil society organizations to equip the students in recognizing the risks of trafficking. It also helps them avoid such risks, promote safe behaviors, and create a protective environment that reduces their own vulnerabilities before exploitation can occur.

Part of this is the joint ICMPD-NAPTIP Vanguards in 250 schools across the five Nigerian states of Benue, Delta, Edo, Enugu, and Ogun, targeting approximately 100,000 students. In addition to STEAP activities, the Vanguard enables them to become peer educators, helping them become better informed, more vigilant, and resilient advocates in preventing trafficking in their schools and communities.

Beyond STEAP, the Nigerian government works more broadly on anti-trafficking efforts through the . Also funded by the Dutch Government and implemented by ICMPD, TIPVAP looks to address human trafficking by upscaling capacity of the investigators and prosecutors, establishing effective victim referral systems, and raising public awareness. The initiative also improves the investigation and prosecution of cases, and ensures victims receive timely, coordinated support including legal aid and protection services — and its community outreach enjoins communities to recognize and report these crimes.

“Addressing the diverse social, economic, and legal factors that drive human trafficking particularly by reaching children and youth, who are among the most vulnerable is a key pillar of our collaboration with NAPTIP in Nigeria and across the wider West African region,” says a spokesperson for STEAP at ICMPD. “By supporting NAPTIP’s efforts, ICMPD is able to apply its technical expertise and unique perspective on migration to meaningful, practical work. We remain firmly committed to partnering with the Nigerian government in this vital endeavor.”

Given its strategic location in the West African region, Nigeria is well-positioned to foster cross-border cooperation and intelligence sharing, while harmonizing victim-protection legal frameworks to keep people safe from trafficking. As it continues to implement its National Action Plan on Human Trafficking, the joint efforts of NAPTIP and ICMPD remain crucial in addressing the evolving challenges of human trafficking and ensuring the protection of vulnerable populations.

You can learn about more ways to combat human trafficking successfullyĚýhere