US Treasury Is Using AI To Fight Fraud With A Massive Savings Of Over $4B

The US Department of the Treasury announced it prevented and recovered over $4 billion in fiscal year 2024 using enhanced fraud detection processes, which included machine learning AI. With a national debt nearing $36 trillion, every billion matters.

With a stated mission of maintaining a strong economy and being stewards of taxpayer money, earlier this year, the US Treasury joined forces with the Internal Revenue Service and came out with new rules to ensure crypto traders pay taxes on their digital assets. As there are more attempts at fraud and identity theft, agencies such as the Treasury are looking for any way to combat the growing costs of running a nation. So, it is no surprise the Treasury is finding new ways to prevent and recover money with the aid of new technologies like artificial intelligence.

“Treasury takes seriously our responsibility to serve as effective stewards of taxpayer money. Helping ensure that agencies pay the right person, in the right amount, at the right time is central to our efforts,” remarked Deputy Secretary of the Treasury Wally Adeyemo. “We’ve made significant progress during the past year in preventing over $4 billion in fraudulent and improper payments. 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.” 


According to a press release, the highlights of the announcement were as follows:

• Expanding rick-based screening resulting in $500 million in prevention. 
• Identifying and prioritizing high-risk transactions resulting in $2.5 billion in prevention. 
• Expediting the identification of Treasury check fraud with machine learning AI resulting in $1 billion in recovery. 
• Implementing efficiencies in payment processing schedule resulting in $180 million in prevention.

The Treasury noted as the federal government’s central disbursing agency, it securely disburses approximately 1.4 billion payments valued at over $6.9 trillion to more than 100 million people annually. It pointed out online payment fraud is expected to cumulatively surpass $362 billion by 2028, and it is uniquely positioned to support federal programs proactively mitigate the risk of financial fraud by implementing and leveraging data and emerging technologies, such as AI.

The agency reported that the savings were up from $652.7 million in FY23. The increase is said to reflect the “dedicated efforts by Treasury’s Office of Payment Integrity (OPI), within the Bureau of the Fiscal Service to enhance its fraud prevention capabilities and expand offerings to new and existing customers.”