Today, Congresswoman Maxine Waters (D-CA), the top Democrat on the House Financial Services Committee, released information on day 28 of the Trump-Republican shutdown—which Trump and Republicans initiated because of their refusal to negotiate with Democrats to protect health care for millions of Americans. Today’s release highlights how the ongoing shutdown has limited the operations of offices within the U.S. Treasury Department tasked with combating financial crime, including FinCEN (Financial Crimes Enforcement Network). This has left the United States more vulnerable to financial fraud, scams, and other crimes.

What Does FinCEN Do?

FinCEN is America’s Financial Intelligence Unit, the bureau within Treasury responsible for safeguarding the U.S. financial system from illicit activity, combating money laundering and the financing of terrorism, and promoting national security through the strategic use of financial authorities and the collection, analysis, and dissemination of financial intelligence. Leveraged by law enforcement, intelligence, and regulatory partners, FinCEN’s work supports investigations pursued by U.S. and foreign authorities.

Its activities include administering the Bank Secrecy Act (BSA), America’s federal anti-money laundering and counter-terrorism financing statute. It works with financial institutions (FIs), like banks and casinos, to set BSA regulations, to receive and maintain financial transactions data, and to share analysis of that data—for example about financial fraud trends and techniques. FinCEN also disseminates the collected information for law enforcement purposes, while also building cooperation with counterpart FIUs around the globe.

With these authorities, FinCEN has helped law enforcement by:

• Clawing back $82.6 million for victims of cyber-enabled financial fraud in fiscal year (FY) 2024
  
• Facilitating the freezing of $126.4 million in cyber-enabled fraud proceeds in FY 2024
  
• Issuing Financial Trend Analyses for FIs and law enforcement on issues like elder financial exploitation, mail theft-related check fraud, and business email compromise in the real-estate sector
  

That’s not all. As the lead BSA regulator, FinCEN ensures that financial institution customers and the U.S. financial system are protected from fraud and other bad acts by requiring banks and other FIs to take a number of precautions against financial crime; where that does not happen, FinCEN can step in to identify and punish the violators.

A notable example of this occurred in November 2023, when FinCEN announced the largest settlement in Treasury’s history, a $3.4 billion civil money penalty against cryptocurrency exchange, Binance, for completing transactions that were connected to ransomware, terrorist financing, high-risk jurisdictions, darknet markets and scams, and child sexual abuse material. The willful failure to develop, implement, and maintain an effective anti-money laundering program that was reasonably designed to prevent Binance from being used to facilitate money laundering and the financing of terrorist activities also resulted in the felony conviction of Changpeng Zhao, Binance’s CEO—who was inexplicably pardoned this week by President Trump, despite overwhelming evidence and the CEO’s own guilty plea.

The Aspen Institute’s National Task Force on Fraud and Scam Prevention estimates that American households are defaulted and scammed of more than $158 billion every year. Unfortunately, the Trump-Republican shutdown has left much of the work that’s been done by FinCEN to stop fraud and scams at a complete standstill.

How is the Trump Shutdown Harming U.S. Efforts to Combat Financial Fraud?

Americans have become increasingly aware of the phone calls, emails, and cyber intrusions that attempt to defraud our families, businesses, and communities of hard-earned financial resources. We know that these scams—including cryptocurrency scams, loan fraud, timeshare fraud, check fraud, business email schemes, and deep-relationship confidence scams, to name only a few—are often committed by transnational criminal organizations. The highly skilled analysts, investigators, and regulators at FinCEN are essential to combating these bad actors, yet during the shutdown, their work is severely curtailed. Without full staffing, U.S. victims and potential victims of fraud are less protected from such sophisticated, international financial criminals. Staff shortages may negatively impact the ability of Treasury and its law enforcement partners to:

• Trace and recover illicit funds;
  
• Support investigations and prosecutions of fraudsters and scam artists, including those affiliated with TCOs;
  
• Collaborate internationally on financial crime investigations;
  
• Enforce financial crime compliance requirements to ensure that financial institutions are doing their part to protect their customers and the U.S. financial system;
  
• Analyze Bank Secrecy Act data submitted by financial institutions;
  
• Provide guidance to financial institutions and others for how to detect and deter financial fraudsters; and
  
• Target bad actors with special measures and other actions that make it more difficult and less desirable to commit their crimes.
  

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