Banking and Finance Law Daily Wrap Up, CRIMES AND OFFENSES—Treasury issues advisory, proposed rule targeting fraud in government health care benefits, (Mar 30, 2026)

By Nadine E. Roddy, J.D.

The advisory is intended to assist financial institutions in identifying and reporting suspicious activity that may indicate fraud schemes.

On Mar. 30, 2026, the Treasury Department announced the Financial Crimes Enforcement Network (FinCEN) has published an advisory (FIN-2026-A001) urging financial institutions to be vigilant in identifying and reporting suspicious transactions possibly related to fraud schemes targeting Medicare, Medicaid, and other federal and state health care benefit programs. The advisory follows closely on the heels of President Trump’s Executive Order (E.O.) 14249, Protecting America’s Bank Account Against Fraud, Waste, and Abuse, issued five days earlier (see Banking and Finance Law Daily, Mar. 17, 2026). Among other things, the E.O. was intended to promote financial integrity by enabling Treasury to more easily conduct screening for improper payment and fraud prior to disbursing funds to the relevant agencies.

The advisory provides financial institutions with an overview of how fraudsters—including unscrupulous medical professionals, organized crime groups, and even transnational criminal organizations (TCOs)—target government health care benefit programs. It also highlights associated money laundering typologies and red flag indicators to help financial institutions identify and report suspicious activity. Methods such as the use of straw owners and shell companies to register as health care providers/suppliers, as well as obfuscation of fraudulent reimbursements through U.S. and international financial systems, are discussed, and a case study of a TCO-orchestrated health care fraud scheme is provided.

Additionally, 24 “red flag” indicators of suspicious activity are listed. Two examples of relevance for financial institutions, include:

• Red Flag #1: A customer with neither legal permanent residence in the United States nor significant experience in the health care industry (e.g., based on the customer’s stated occupation) tries to open a bank account as the owner or employee of a recently established or purchased health care provider or supplier registered with a Health Care Benefit Program.

• Red Flag #4: A customer is a health care provider or supplier registered with a health care benefit program, and the account is accessed through an Internet Protocol (IP) address or Device ID that is linked to multiple accounts at the financial institution or other financial institutions or connected to foreign jurisdictions.

Separately, on the same day, FinCEN issued a proposed rule establishing a framework for offering financial incentives to whistleblowers for actionable tips concerning fraudulent activity. The agency is seeking information on violations of the Bank Secrecy Act, U.S. sanctions programs administered by Treasury’s Office of Foreign Assets Control, and several other laws critical to safeguarding the U.S. financial system.

Earlier this year, Treasury announced a series of initiatives addressing government benefits fraud in Minnesota, including investigative actions by the Financial Crimes Enforcement Network and the issuance of a Geographic Targeting Order imposing additional reporting requirements on certain financial institutions (see Banking and Finance Law Daily, Jan. 12, 2026).

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