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The US Treasury Department says AI tools prevented criminals from stealing $4 billion in taxpayer dollars this year, a dramatic increase from $653 million last year.
The tools have been “transformative,” Renata Miskell, a top Treasury official, tells CNN. They don’t use generative AI, like ChatGPT, but rather are machine learning-based. They’re helping identify high-risk transactions, expedite check fraud, implement efficiencies, and expand risk-based screenings.
The Treasury is a prime target for financial fraud because it doles out huge sums of cash every year for Social Security, Medicaid, tax refunds, federal paychecks, and stimulus checks. The much-needed technology upgrade is helping plug gaps in the system, using techniques already in use by leading banks and credit card companies.
“Treasury takes seriously our responsibility to serve as effective stewards of taxpayer money,” says Deputy Secretary of the Treasury Wally Adeyemo. “Helping ensure that agencies pay the right person, in the right amount, at the right time is central to our efforts.”
Since the pandemic, fraud and improper payments have been on the rise. The IRS is still investigating an estimated $9 billion in fraud cases related to pandemic-era stimulus checks and loans. Online payment fraud is an ongoing issue, with losses expected to pass $362 billion by 2028.
The Treasury says it is “uniquely positioned” to support government-wide efforts to mitigate financial fraud with its new technology. In May 2024, it announced a data-sharing partnership with the Department of Labor to provide state unemployment agencies with a more robust system.
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“We will continue to partner with others in the federal government to equip them with the necessary tools, data, and expertise they need to stop improper payments and fraud,” says Adeyemo.
The IRS is also scaling up its use of AI, and in 2023 debuted a new system to identify high income earners and wealthy corporations evading taxes.
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About Emily Dreibelbis Forlini
Senior Reporter
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