US Treasury Used AI to Uncover $4 Billion Fraud: Here’s How

US Treasury has been in a constant battle with the rising crimes around money fraud. In general, money laundering, tax invasions, thefts, and many similar crimes involve complex structures, where reviewers have to go through hundreds and thousands of transactions and reports to figure out illegal activity. However, with Artificial Intelligence, this process is way smoother. With AI and a data-driven approach, the official has recently uncovered $4B in frauds.

It is also important, as the Federal Government Accountability Office estimated that these federal agencies lose around $233-$521B in such fraud. This creates a need to leverage data analytics in the identification and prevention of such crimes.

US Treasury Recovered $4B With AI Within A Fiscal Year

In the last few years, Artificial Intelligence’s usage has grown exponentially due to its high threshold and capability. Its impact is also visible in the cryptocurrency, where the A16zcrypto crypto report, revealed that 35% of the projects are implementing this technology. Not the forget, the demand for AI tokens has blossomed in the crypto industry.

Its most beneficial property, analyzing data, is used in hundreds of fields, and the US Treasury is one of its users. Recently, they used AI to study and reveal many hidden patterns and financial crimes. With a US Treasury press release, the official revealed that the U.S. Department of Treasury has put high efforts into involving this technology.

Here, Artificial Intelligence played a major role in identifying fraud, prevention, and recovery. The team has reported that in this fiscal year (September 2023-September 2024), they have recovered more than $4 Billion in money-related frauds and improper payments. In this, $1B was halted in the cheque fraud, and the remaining $3B was from the improper payments.

The announcement breakdown also revealed the prevention of $500 million in fraud/improper payments. Additionally, the team prioritized identifying high-risk transactions, which helped them in preventing another $2.5B.

However, this is not happening for the first time, as the Treasury has been quietly using the technology since 2022. It took a long time to train the system and efficiently analyze these frauds, but the outcome was impressive. The announcement claimed that they had recovered six times the number of the previous year, which was $652.7 million. The US Treasury Official, Renata Miskell, also came forward, calling this experience transformative, where ‘leveraging the data upped their game in fraud detection and prevention.

Fraudsters are good at hiding. They’re trying to secretly game the system,” Miskell said. “AI and leveraging data helps us find those hidden patterns and anomalies and work to prevent them.

Internal Revenue Service Used AI In Identifying Tax Frauds

Internal Revenue Service (IRS), the US’s tax collection agency, which is responsible for enforcing tax laws, collecting taxes, and much more, is taking advantage of artificial Intelligence to crack down on tax frauds. This revelation came after the IRS recovered $1.3B from rich taxpayers.

Additionally, a separate report claims that such taxpayers owe $496B every year. With such high dues, the IRS is planning to continue using AI to fight tax fraud in the future and also for audits. Artificial Intelligence is the new norm in every industry, including crypto. Now, its features and capabilities are improving with the world leaders watch.

Besides, the US Treasury has positioned itself to reduce the risk of these financial frauds with the help of AI. Though it already disburses around 1.4B payments ($5.9 Trillion), the official has acknowledged the rising criminal activities, as they believe the online payment-related frauds can rise to $362 Billion by 2028, requiring implementation of such advanced technology.

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