Treasury Secretary Scott Bessent said Friday that illegal employment practices and related financial schemes generated more than $2.5 billion in suspicious activity connected to payroll tax fraud during 2025.

Speaking at an event with Texas bankers in Houston, Bessent outlined what he described as a broad network of unlawful activity involving labor brokers, shell companies, identity theft, and financial exploitation.

According to Bessent, financial institutions reported more than $2.5 billion in suspicious activity associated with payroll tax fraud schemes this year alone.

“These schemes hurt law-abiding businesses, depress wages, steal taxpayer dollars, facilitate identity theft, and create opportunities for transnational criminal organizations to generate and move illicit proceeds,” Bessent said.

The Treasury secretary connected the activity directly to illegal employment arrangements that, according to his remarks, create unfair competition for businesses operating within the rules while opening the door to larger financial abuses.

Bessent’s comments framed payroll tax fraud as more than a bookkeeping issue, arguing that the effects spread through the broader economy by impacting workers, businesses, and public resources alike.

For supporters of stronger enforcement, the numbers underscore concerns that financial crime and unlawful labor practices often extend well beyond individual bad actors. And as regulators continue tracking suspicious activity, the message from Treasury appears straightforward: schemes that exploit workers and taxpayers may carry a much larger price tag than many realize.