The Headline. The US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has joined other federal law enforcement agencies in placing a “whole-of-government” focus on combatting benefits fraud against the federal and state governments. In a March 30, 2026 Healthcare Fraud Advisory (Advisory, FIN-2026-A001), FinCEN urged financial institutions to be vigilant in detecting, preventing, and reporting fraudulent activity targeting governmental healthcare benefits programs, such as Medicare and Medicaid. FinCEN also identified 24 new, healthcare-focused “red flags.” Although the Advisory is directed to financial institutions, non-bank clients in the healthcare sector can derive important guidance from the Advisory’s analysis.
The Background. While certainly not a new federal priority, the Trump Administration has recently upped federal efforts to prevent and punish…
PAYROLL & HR CONTROLS (PREVENTING “GHOST” SCHEMES)
Payroll fraud is often the hardest to detect because it “looks” like a normal business expense.
- Segregation of Duties (SoD): The person who adds new employees to the system must not be the same person who approves the monthly pay run.
- Mandatory Vacation Policy: Require all financial and HR staff to take 5–10 consecutive days of leave annually. Fraud often surfaces when the perpetrator isn’t there to “hide” the trail.
- Ghost Employee Audit: Perform a quarterly “Headcount Reconciliation” where managers must physically verify every name on their payroll list exists.
- Self-Pay Blocking: Ensure the payroll software has a hard-coded block preventing administrators from editing their own salary or bank details.