Terry Gerton The IRS Criminal Investigations Division just published your 2025 annual report, and there’s some really interesting statistics in here, including $10.6 billion in identified financial crimes. And that’s a big leap up from the 2024 numbers. What do you think is going on? What factors contributed to that increase?

Justin Campbell Well, IRS criminal investigation has approximately 3,000 employees. We hover around that number annually. The key difference this year that we’ve noticed is we brought in a large number of new special agents. So we brought, we graduated 14 different classes this year through our academy. That means those are agents that are hitting the field and opening up new cases and detecting fraud. That has a large impact on our measurables, such as fraud identified. I think that’s a big piece of it. The other piece of is there’s a lot of fraud out there and we are the best in the world at identifying it. And the folks we’re hiring are coming to us from all kinds of backgrounds, well suited for this kind of work in the finance field and legal field. And so when our agents do hit the ground from training, they are well equipped from their prior background as well as their training we give them at the academy to quickly identify that fraud.

Terry Gerton You mentioned a lot of fraud. One of the other numbers that jumps out at me is the seizure of 2.3 petabytes of digital data. So not only is fraud happening, but it sounds like a lot it is happening digitally. In addition to the extra agents, are there new tools that you’ve used or new methods that you have of detecting that fraud and indicting it?

Justin Campbell Well, what we’re learning is all law enforcement agencies are dealing with is, more and more, our society is becoming paperless. And so even on what we would consider more traditional fraud cases, more data is being pulled digitally as opposed to from filing cabinets. When I was an agent, we would plan to seize filing cabinets full of records. And nowadays, professionals, business professionals, third-party money launderers in some cases, others that are committing criminal violations, are really good at scanning evidence, right? And a lot of us do that, a lot of legitimate people do that. I do that in my own personal life. I try to keep as much digital records as possible. What the challenge that presents for us though is, as you saw, we have petabytes of data we seize now. And so when we do these enforcement operations, we do search warrants or search subpoenas for records. A lot of times they are digital in nature. One thing we’re doing is trying to lean into artificial intelligence, large language models to help us more quickly identify fraud and to be more efficient with it. One example of that is we modeled a program this year called our case viability model. And essentially what it does is it looks across the data from our case management system for the past decade plus and says, hey, what is the likelihood success on this case. And it uses large language model technology to give the decision makers some view into the likelihood of success on a given case based on the inputs. So yeah, we are using data or technology, I should say to our advantage. And we are also grappling with the increased use of digitized data by taxpayers on our investigations.

Terry Gerton In addition to your annual report, you’ve also just released your top 10 cases list. It’s the season for top 10 lists. But I was struck in relation to what you just described by a statement that says financial trails are the criminal’s downfall relating to your data comment there. When you think of the top 10 lists, are there one or two that really caught your attention?

Justin Campbell Yeah, there’s two of them in particular that really highlight our skill set. I’ll start with one that’s in the news right now, the Feeding Our Future Investigation based out of Minneapolis. That’s over $250 million in fraud. Our agents have been at the table since day one, along with the FBI and U.S. Postal Inspection Service identifying that fraud. We are very proud of the work that our agents have done on that case. It’s been going on for a number of years now, and it really highlights where our agents can impact program fraud in particular. Another case that I think really speaks to something that only CI can do effectively is large investigations involving financial institutions. This past year, TD Bank was subject to a $670 million investigation related to failure to maintain the anti-money laundering program, and they pleaded guilty, or agreed, I should say, to pay a record-breaking $1.8 billion in penalties associated with that case. That’s a very large, complex case that I think speaks to the work that CI can do. And then the last point I’ll make, a case that really gets my attention in the role I’m in now, and it should catch the attention of taxpayers because these types of cases compound and this is an unscrupulous return preparer. We had an individual by the name of Rafael Alvarez in the Bronx, New York, submitted false tax returns on behalf of his clients to the tune of $145 million in fraud. And that particular case was sentenced this year. Mr. Alvarez was sentenced to prison and he helped his company generate approximately $12 million in fraudulent proceeds over the duration of the fraud. So, you know, those kinds of cases really do have a big impact on taxpayers because that comes out of the treasury, it comes out of the taxes that they paid in, and it really gets our attention.

Terry Gerton I’m speaking with Justin Campbell. He’s the acting deputy chief of IRS Criminal Investigations. Well, speaking of tax fraud, I mean, this administration has made the uncovering of waste, fraud, and abuse one of its key tentpoles in policy and programs. Your report says you identified $4.5 billion in tax fraud in 2025. Are there trends that are driving that increase?

Justin Campbell I wouldn’t say a trend that we have detected that, we would say has caused an uptick in fraud. Look, fraud’s there. It’s always going to be there. As much as many of us are frustrated by that, we are very accustomed to it at the IRS. As I stated earlier, I think the uptick in-part is related to the number of agents that hit the ground running in fiscal year ’25. That enables us to identify fraud quicker. And I think there’s also the fact that the agents that we are hiring are really sophisticated. I’ve been really impressed with their backgrounds when they start. So we aren’t training someone with no background in finance, for example, or law. These are very sophisticated individuals that come on board with us. So I would attribute the uptick primarily to the agents onboarding in fiscal year ’25. I couldn’t necessarily point to a specific trend. Now, we all know that we’re seeing a lot of program fraud reference in the news. There’s been a number of program of fraud cases brought related to COVID, different COVID programs. That could be driving some of that up, but we haven’t necessarily detected what we would point to as a specific trend on a specific type of fraud.

Terry Gerton That helps clarify the background here. I want to shift gears just a little bit because your annual report also talks about some new partnerships initiatives that IRS Criminal Investigations is undertaking, both with global partners and with financial institutions. Can you tell us a little about how those partnerships work and how they impact the findings that your agents make.

Justin Campbell Yeah, one of the partnerships that we’re really proud of is, we call it CI First, and it’s a program with banks where we work closely with them to provide them feedback on their regulatory responsibility to report certain types of transactions. And we have found over the years and working with our partners at the financial institutions that they are seeking feedback. They want to comply with the law, but they also want to know how well they’re doing in certain areas. And so we have a specific effort called CI First that provides feedback to them to ensure that they’re getting the feedback they need, and it ensures we get a high quality product from the banks as a result of their contributions.

Terry Gerton And how does that help amplify your reach, your enforcement reach?

Justin Campbell When we get strong relationships with financial institutions, we get great results. I’ll give you an example. So as an agent, I had personal relationships with certain bankers after years of conducting financial investigations. And they knew I was an IRS special agent. And so when someone walks into their bank and one of their lobbies and says, hey, I have a six-figure treasury check, I want to cash, their spide-y senses went up, right? And they called me directly and said, hey, this doesn’t seem right. Can you look into this? We’re filing an SAR on this. This doesn’t seem right, so anyway, that’s the kind of example I think that I would point to, strong relationships result in better cooperation from the banks.

Terry Gerton You’ve described a pretty busy environment with your agents and the level of fraud. As you look towards 2026, are there any particular trends or areas that are on your radar for enforcement?

Justin Campbell Well, we want to focus heavily on tax gap efforts. What I mean by tax gap is at the IRS, we know that there’s a certain amount of taxes owed as opposed to what is actually paid. And so that difference is what we call the tax gap. And some percentage of that is criminal in nature. We of course would never investigate someone for an unintentional failure to report income, but when there’s intentional failure to report income and intentional filing of a fraudulent return, that’s when an IRS criminal investigation is absolutely going to get involved. And so one of our big efforts this year is to look at where we can impact the tax gap more effectively. We are looking at high income non-filing, particularly. We would really want to focus in on that, as well as a few other case program areas, I should say that we have noted in the past, require constant policing. Employment tax fraud is another great example of an area that is subject to fraud based on our experience and we’ll continue our efforts this year in policing employment tax fraud.

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