Category: FinCEN (US)

  • U.S. Treasury Identifies $270 Million in Suspicious Activity Linked to Federal Student Aid Fraud

    October 19, 2026

    FinCEN Refers Findings to Federal Investigators to Combat Fraud and Protect Taxpayer Dollars

    WASHINGTON – The U.S. Department of the Treasury announced today that its Financial Crimes Enforcement Network (FinCEN) has identified approximately $270 million in suspicious financial activity potentially linked to fraud against federal student aid programs. FinCEN has referred these findings to federal investigators to pursue potential fraud schemes targeting federal student aid programs and help ensure those responsible are held accountable. These referrals underscore the Trump Administration’s commitment to eliminating fraud, protecting taxpayers, and safeguarding the integrity of federal student aid programs.

    “Federal student aid is intended to expand educational opportunities, not line the pockets of fraudsters who steal from students pursuing their education and hardworking taxpayers,” said Treasury Secretary Scott Bessent. “The Trump Administration will not tolerate criminals who exploit government programs for personal gain. Treasury is working with financial institutions and law enforcement to identify these fraud schemes, recover stolen funds, and hold those responsible accountable.”

    “Federal student aid is meant to support students, not fraudsters. That is exactly why we introduced the new FAFSA fraud detection tool earlier this year, which stops fraud at the start of the federal student aid process,” said Education Secretary Linda McMahon. “We are proud to partner with the White House Task Force to combat fraud, waste, and abuse across these critical programs – already saving American taxpayers more than $2 billion in less than 2 years!”

    In a July 2026 Alert, FinCEN warned financial institutions about student aid fraud and asked them to report suspicious activity. That Alert explained that schools or their payment contractors often send aid refunds by electronic bank transfer and that the payment description often includes the word “refund” along with the school’s name or initials. The Alert also noted that fraudsters often move stolen aid through money mules, shell companies, and fake accounts to hide the source of the money. These red flags help financial institutions spot suspicious payments and report them to FinCEN in suspicious activity reports, as required by the Bank Secrecy Act (BSA).

    Financial institutions have filed nearly 100 suspicious activity reports since the July Alert. FinCEN’s review of these reports identified more than 20,000 potentially suspicious transactions since February 2026. These reports reflect suspicious activity that has been identified and reported by financial institutions and, therefore, should not be considered a complete representation of the scope of any particular type of suspicious activity.  Accordingly, FinCEN has referred this information to law enforcement as tip-and-lead information for further investigation.

    Federal student aid fraud schemes often involve fraudulent enrollments designed to divert financial assistance away from legitimate students. In “ghost student” schemes, criminals steal personal information, such as names and Social Security numbers, and use it to enroll fake students in classes under a victim’s identity. Fraudsters may also use super intelligence to produce fake documents that blend stolen information with invented details, which creates what are known as synthetic identities that can pass identity checks. Victims, including minors, often do not know that someone has received student aid in their name.

    In “straw student” schemes, fraud rings pay real people for their personal information, enroll those people at a school, and then keep the aid refunds issued to them. Corrupt school employees sometimes help these rings by recruiting straw students and altering their school records. Student aid fraud drains taxpayer funds, and in some cases, keeps real students out of classes that fake enrollees have filled.

    Student aid fraud has real consequences for students and American taxpayers. It drains finite grant resources from deserving students, potentially prevents legitimate students from enrolling in classes occupied by fraudulent enrollees, and can leave identity theft victims responsible for debts they never incurred.

    As part of the Trump Administration’s efforts to eliminate fraud, waste, and abuse across the federal government, Treasury is working with the White House Task Force to Eliminate Fraud, led by Vice President Vance, and encouraging whistleblowers to report credible information involving fraud, money laundering, sanctions violations, and tax-law violations. Whistleblower tips, combined with financial institutions’ reporting under the Bank Secrecy Act, help Treasury and its law enforcement partners uncover criminal networks, recover taxpayer funds, and hold bad actors accountable.

    Treasury will continue to leverage financial intelligence, strengthen coordination across government, and pursue those who seek to profit by defrauding American taxpayers and harming legitimate students.

    In My Humble Opinion:

    Firstly, “potentially linked” is pretty weak sauce. FinCEN is not referring this for prosecution – they’re referring it for investigation.

    Secondly, $270 million total? That’s a rounding error in the federal budget, assuming it’s all found to actually be fraudulent. And you know that it’s not a single borrower – it’s much more likely to be thousands, if not tens of thousands. So, the cost of the investigations are likely to rival the actual funds recovered.

    If I didn’t know better, I’d guess this has something to do with the calendar….

  • Iran-related and Counter Terrorism Designations

    Treasury Press Release: Iran’s Access to UAE Banks Targeted Under Operation Economic Outcast

    State Press Release: U.S. Sanctions Sever Financial Lifelines of Iranian Regime

    Additions:

    The following individual has been added to OFAC’s SDN List:

    OFAC Programs:

    • SDGT  Global Terrorism Sanctions Regulations, 31 C.F.R. part 594
    • IFSR  Iranian Financial Sanctions Regulations, 31 C.F.R. part 561

    TAEEDI, Reza Mohammad

    • Address: Dubai, United Arab Emirates
    • DOB: 24 Aug 1975
    • Nationality: Iran
    • Additional Sanctions Information: Subject to Secondary Sanctions
    • Gender: Male
    • Passport: P6602606
    • Alt. Passport: E96037407
    • National ID No.: 784-1975-3624749-3 (United Arab Emirates)
    • Party Type: Individual
    • Linked to: Bank Melli Iran

    Supplemental Information: Taeedi is the general manager of Bank Melli Iran’s Dubai branch. Treasury says that branch has moved billions of dollars through accounts tied to the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF), letting the IRGC-QF and its parent organization move funds into and out of Iran and helping fund Iran-aligned proxies, including in Iraq. State’s parallel statement describes Bank Melli more broadly as a financial hub for Iran’s armed forces, naming both the IRGC-QF and the Ministry of Defense and Armed Forces Logistics as beneficiaries. OFAC designated Taeedi under E.O. 13224, as amended, for acting on Bank Melli’s behalf.

    The following entity has been added to OFAC’s SDN List:

    OFAC Program: IRAN-EO13902  Executive Order 13902

    KAMENG TRADING LIMITED

    • Address:
      • Room 701, Unit 108, 7/F, Tower B, New Mandarin Plaza, 14 Science Museum Road, Tsim Sha Tsui, Kowloon, Hong Kong, China
      • Unit 89, 3F, Yau Lee Centre, No. 45, Hoi Yuen Rd, Kwun Tong, Hong Kong, China
    • Organization Established Date: 24 Jul 2024
    • Business Registration Number: 76846373 (Hong Kong)

    Supplemental Information: Treasury ties Kameng Trading Limited to Pedram Pirouzan Exchange House, also known as Opal Exchange, an already-designated Iranian exchange house that used the Hong Kong company to launder money for Iran. State’s statement likewise describes the firm as a Hong Kong-based company that helped already-designated Iranian individuals and entities access the international financial system. OFAC designated Kameng Trading Limited under E.O. 13902 for operating in the financial sector of the Iranian economy.

    and here is the NPRM (Notice of Proposed Rulemaking) of the Section 311 designation proposed by FinCEN:

  • Treasury Proposes Rule to Implement the GENIUS Act’s Requirements to Counter Illicit Finance

    April 8, 2026

    Promotes American Leadership in Payment Stablecoins

    WASHINGTON—Today, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) issued a joint proposed rule to implement provisions of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act).  The proposed rule, which implements the GENIUS Act’s anti-money laundering and sanctions compliance program requirements, encourages innovation in payment stablecoins while providing an appropriately tailored regime to mitigate potential illicit finance risks.

    “President Trump is strengthening American leadership in digital financial technology,” said Secretary of the Treasury Scott Bessent.  “This proposal will protect the U.S. financial system from national security threats without hindering American companies’ ability to forge ahead in the payment stablecoin ecosystem.”

    The GENIUS Act provides a framework for the federal regulation of payment stablecoins. The law directs Treasury to issue regulations that would treat permitted payment stablecoin issuers (PPSIs) as financial institutions for purposes of the Bank Secrecy Act (BSA) and impose anti-money laundering obligations on PPSIs.  The GENIUS Act also mandates that PPSIs maintain an effective sanctions compliance program and directs Treasury to issue appropriate regulations implementing such obligations.

    The proposed rule would subject PPSIs to requirements applicable to financial institutions relating to prevention of money laundering and impose obligations specified in the GENIUS Act. Consistent with FinCEN’s efforts to modernize BSA requirements, the proposed obligations are designed to be fit for purpose, assist law enforcement, and minimize unnecessary burden. The proposed rule would require PPSIs to adopt and maintain an effective sanctions compliance program as required by the GENIUS Act.

    FinCEN and OFAC welcome public comments on the proposal, which will be published in the Federal Register in the coming days.

    Notice of Proposed Rulemaking

    Fact Sheet

    Report to Congress from the Secretary of the Treasury on Innovative Technologies to Counter Illicit Finance Involving Digital Assets