Labor & Employment Law Daily Wrap Up, AGENCY NEWS—FinCEN urges banks to detect, report suspicious ‘non-work authorized population’ activity, (Jun 9, 2026)

By Jeff Williams

The advisory warned that unlawful employment schemes enable employers to gain unfair advantages and can facilitate the financing of criminal and terrorist activity.

The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN), joined by the Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and National Credit Union Administration, has issued an advisory calling for financial institutions to “be vigilant against fraud schemes and other suspicious or potentially criminal activities involving the unlawful employment of illegal aliens and the associated risks to the integrity of the U.S. financial system.”

Schemes. The FinCEN advisory highlighted, among other things, that some “complicit employers have pleaded guilty to hiring unlawful aliens for on-the-books employees” and “knowingly accepting” fraudulent identification documents—such as legal permanent resident cards, Social Security cards, and driver's licenses. In addition to pointing to “unlawful aliens” illicitly obtaining Social Security numbers (SSNs) and other personally identifiable information, FinCEN said that its analysis of Bank Secrecy Act (BSA) reporting indicated that “complicit labor brokers” and others may use foreign identity documents or an Individual Taxpayer Identification Number (ITIN) to open bank accounts for shell companies to engage in illicit transactions, such as money laundering for transnational criminal organizations, foreign terrorist organizations, and drug trafficking organizations.

The bulletin urged banks to pay particular attention to the use of ITINs as part of their application of appropriate risk-based procedures for customer due diligence, especially when an ITIN is present in lieu of Social Security numbers (SSNs) or valid employment authorization documents to obtain credit products or open accounts. FinCEN also encouraged financial institutions that have concerns about the authenticity of SSNs to verify the SSN to determine if it matches Social Security Administration records.

Red Flags. The bulletin outlined 18 “red flag indicators” to “help financial institutions detect, prevent, and report suspicious activity connected to fraud schemes involving the unlawful employment of unlawful aliens,” adding: “FinCEN reminds financial institutions that no customer type presents a single level of uniform risk or a particular risk profile related to money laundering, terrorist financing, or other illicit financial activity.”

Red flags regarding individual customers include the use of an SSN that “does not match or is inconsistent” with SSA records, as well as the opening of an account by a customer using a non-U.S. passport or ITIN “claiming to be self-employed or operating a small business in the agriculture, construction, domestic service, hospitality, or staffing industries and is receiving a significant amount and volume of recurring check deposits from multiple companies before either making a significant and repetitive amount of structured cash withdrawals or issuing low-dollar checks to multiple individuals.”

Other red flags regarding individuals, FinCEN said, include customers cashing a “significant volume” of checks drawn on accounts held by companies in the construction, domestic service, hospitality, or staffing industries, as well as customers with “no known prior involvements” in those types of businesses who provide a non-U.S. passport or ITIN as a form of identification when opening an account for a new company in one of those industries.

Red flags regarding large companies in the construction, domestic service, hospitality, or staffing industries include, among others, the identification of such companies in Immigration and Customs Enforcement (ICE) worksite enforcement news releases and open-source reporting as having a "history of worksite compliance violations from ICE” and companies making federal and state payroll tax deductions that are “significantly less than what would be expected based on their business operations and associated workforce size,” the bulletin said.

FinCEN also detailed several red flags regarding small companies operating in those industries, including those that issue “recurring, large volumes of checks for under $1,000 that are made payable to a significant number of separate individuals who cash the checks” and those that are new customers with “minimal to no online presence and has indicators of being a shell company.”

Executive Order. FinCEN noted that the Restoring Integrity to America’s Financial executive order (E.O. 14406) President Trump issued May 19, 2026, directed the Treasury Department to issue the advisory as part of a “whole-of-government effort” to address risks from non-work authorized populations and their employers. The advisory also “aligns with FinCEN’s Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) National Priorities of Fraud, Terrorist Financing, Drug Trafficking Organization (DTO) Activity, TCO Activity, and Human Trafficking and Human Smuggling, and is issued as part of Treasury’s continued effort to prevent the exploitation of the U.S. financial system by illegal aliens in the United States,” FinCEN said.

Along with requesting that financial institutions file suspicious activity reports regarding such activity, FinCEN urged financial institutions and the public to report “any tips or complaints about employers that knowingly employ and/or exploit unauthorized workers to ICE’s Tip Form or by calling (866) 347-2423.”

CFPB. Last week, the Consumer Financial Protection Bureau issued a statement reminding creditors that they are permitted to consider an applicant’s immigration status or status as a permanent resident when making lending decisions (see Banking and Finance Law Daily, June 5, 2026).

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