US Treasury Recovers $4 Billion with AI, Sixfold Increase from Previous Year

Transforming Fraud Detection Through Artificial Intelligence

The United States Department of the Treasury has achieved remarkable success in combating fraud, recovering an astounding $4 billion in fraudulent and improper payments during the 2024 fiscal year.

This figure represents a significant increase compared to the previous year, when only $652.7 million was reclaimed.

The department’s successful recovery efforts can be attributed to its innovative use of artificial intelligence (AI) and machine learning, which began in late 2022.

How AI is Revolutionising Data Analysis

The Treasury's deployment of AI technology has allowed it to sift through vast amounts of data more effectively than ever before.

Renata Miskell, a Treasury official, emphasised the transformative nature of this approach, stating,

“It’s really been transformative.”

By leveraging data, the Treasury has enhanced its capabilities in detecting and preventing fraud.

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

The Scale of Treasury Operations

Managing approximately 1.4 billion payments annually, amounting to a staggering total value of $6.9 trillion, the Treasury is responsible for a substantial portion of the nation’s financial transactions.

The effectiveness of AI in this context cannot be overstated.

By identifying hidden patterns that may otherwise go unnoticed, the Treasury can proactively address fraudulent activities before they escalate.

A Broader Commitment to Financial Integrity

Wally Adeyemo, Deputy Secretary of the Treasury, remarked on the agency’s commitment to responsible stewardship of taxpayer funds, affirming that the Treasury “takes seriously our responsibility to serve as effective stewards of taxpayer money.”

This dedication extends beyond merely recovering lost funds; it encompasses a broader mission to enhance regulatory and enforcement efforts against financial crimes.

In May 2023, the Treasury announced plans to further expand its AI initiatives in this domain.

Following Suit: Other Government Agencies Embrace AI

The Treasury is not alone in its pursuit of advanced technology for fraud detection.

The Internal Revenue Service (IRS) has also turned to AI, unveiling its deployment of the technology to identify tax evasion, particularly among large hedge funds and law firms.

As government agencies increasingly adopt AI, the impact on fraud prevention and detection could be substantial.

A Rising Threat of Online Payment Fraud

As the Treasury and IRS work diligently to combat fraud, the stakes continue to rise.

Juniper Research predicts that online payment fraud could surpass a staggering $362 billion by 2028.

With such a significant threat on the horizon, the ongoing development and application of AI in detecting fraudulent activities have never been more critical.

The efforts of the Treasury and other agencies highlight a proactive approach to safeguarding taxpayer dollars in an increasingly complex financial landscape.