U.S. criminal investigators identified $10.59 billion in financial crimes in fiscal year 2025, as the IRS’s law enforcement arm intensified enforcement against pandemic-era fraud schemes while continuing to broaden its reach beyond traditional tax cases to encompass cybercrime, money laundering, narcotics trafficking, and national security investigations.
IRS Criminal Investigation (IRS-CI) officials said on Dec. 12 that many of the agency’s fiscal 2025 enforcement results stemmed from multi-year investigations into pandemic-era fraud, which the annual report shows are now yielding prosecutions and lengthy prison sentences after years of financial analysis, digital evidence collection, and coordination with prosecutors.
Of the $10.59 billion identified, $4.49 billion was tied to tax fraud, more than double the amount recorded the previous year, while more than $6.1 billion stemmed from non-tax financial crimes, including money laundering, cyber-enabled fraud, and cartel-linked activity. Overall financial crimes identified rose 15.7 percent from fiscal 2024, the IRS said.
“In fiscal year 2025 ... IRS-CI held some of the most egregious tax criminals accountable, dismantled schemes that targeted the vulnerable and defrauded government programs, applied its financial expertise to disrupt drug traffickers, and safeguarded our nation’s national security by investigating sanctions evasion and illegal hiring schemes,” IRS Criminal Investigations Chief Guy Ficco said in a statement in the report.
Pandemic-related cases featured prominently throughout the report, including large-scale abuse of COVID-19 relief programs such as the Employee Retention Credit, Paycheck Protection Program loans, and federal child nutrition funds. In one of the largest pandemic fraud cases in U.S. history, defendants in the Feeding Our Future scheme were sentenced during the fiscal year for defrauding American taxpayers of more than $250 million intended to feed low-income children, with the scheme’s leader receiving a 28-year prison sentence.
The report said IRS-CI initiated 588 investigations involving more than $5.6 billion in potentially fraudulent Employee Retention Credit claims covering tax years from 2020 through 2024. While many of those claims were filed years earlier, investigators said fiscal 2025 saw a surge in enforcement activity as evidence was consolidated and cases advanced to charging decisions.
At the same time, IRS-CI highlighted its expanding role beyond tax enforcement. The agency devoted around 63 percent of its investigative time to tax crimes, with the remainder focused on non-tax violations, including narcotics trafficking and other crimes.
“IRS-CI plays a critical role in satisfying broader national law enforcement priorities, including protecting national security and combating narcotics trafficking, terrorist financing, sanction violations, and cybercrimes,” the report states, adding that its enforcement efforts “deter financial crimes by reinforcing trust in the U.S. financial system and strengthening the economy.”
During the fiscal year, IRS-CI seized more than $800 million in assets and returned about $100 million to crime victims, with the agency touting its emphasis on financial recovery alongside prosecution.
The report also highlighted major institutional cases, including a sweeping investigation into TD Bank, which pleaded guilty to Bank Secrecy Act and money laundering conspiracy violations and agreed to pay $1.8 billion in penalties. Other cases included cryptocurrency laundering tied to the Bitfinex hack and international schemes involving drug trafficking and sanctions evasion.
