The Treasury Department is utilizing artificial intelligence (AI) to tackle check fraud, successfully preventing or recovering over $1 billion in fraudulent payments in the past year, as announced by the agency on Thursday. According to a press release from the Treasury Department, machine learning AI helped recover approximately $1 billion lost to check fraud during fiscal 2024. This increased AI application is part of a series of advanced fraud detection processes implemented by the department throughout the fiscal year. These enhanced measures contributed to the prevention or recovery of over $4 billion in total fraud, the agency reported. The machine-learning algorithms analyzed vast amounts of data to assist the Treasury Department in identifying potential fraud schemes more efficiently. The department chose not to disclose specific instances due to the sensitive nature of their operations. The overall amount of fraud recovered or prevented also included $2. 5 billion through the identification and prevention of high-risk transactions, $500 million via expanded “risk-based” assessments, and $180 million from improved payment processing efficiency. “Treasury is committed to being effective stewards of taxpayer funds.

Our goal is to ensure that agencies disburse payments to the correct individuals, in accurate amounts, and on time, ” stated Deputy Treasury Secretary Wally Adeyemo. The Treasury Department warned that online payment fraud is projected to exceed $362 billion by 2028, according to findings from Juniper Research. The Treasury’s adoption of AI mirrors a similar initiative by the IRS, which began last year to utilize this technology in combating back taxes. In this case, AI has the capability to more readily identify patterns of tax avoidance.