Scammers are not lone criminals in a basement, convincing grandmothers to click on a bad link and send money to a Nigerian prince. In reality, scams are highly sophisticated, often perpetrated by foreign actors, and an integral financial pillar in a global criminal economy. Scams target all Americans and funnel billions of dollars overseas to bad actors who threaten the United States. Scams now rival the global drug trade in size and are often enabled by foreign adversaries that receive billions of dollars in funds stolen from Americans every year. Available FBI and FTC complaints document about $16 billion and $12 billion in annual losses, respectively, and the FTC estimates that, accounting for under-reporting, total fraud-related losses to U.S. consumers total $158 billion per year.

Scams pose a significant threat to the United States. The U.S. Intelligence Community’s Annual Threat Assessment identified scams as part of a broader nexus of “criminal activity threatening the United States,” carried out by Transnational Criminal Organizations (TCOs) and state-affiliated groups involved in human trafficking, drug trafficking, and weapons and human smuggling.

These crimes harm American citizens and undermine U.S. law enforcement and national security efforts. Law enforcement efforts to mitigate scams and fraud are not commensurate with the growth of scams. Meanwhile, U.S. law enforcement capabilities fall further behind; one Senior Secret Service official's congressional testimony called for a whole-of-nation effort to fortify and amplify efforts. Similar concerns have been raised through congressional testimonies, including Chairman of the Senate Judiciary Committee Senator Chuck Grassley (R-IA).

Yet, despite this recognition, scams targeting American households have not been treated as a discrete threat or prioritized for disruption, and the U.S. still lacks a coordinated, ecosystem-wide strategy to combat scams and fraud. The National Task Force on Fraud and Scam Prevention, convened by the Aspen Institute Financial Security Program (Aspen FSP), has developed a set of recommendations that proposes a coordinated national strategy to suppress fraud, modernize legal frameworks, and undermine the scam business model by making it harder for transnational criminals to prey on American households.

Elevating scams as a national security threat is a meaningful step

When U.S. policymakers discuss national security, the focus traditionally falls on terrorism, narcotics, and cyber threats from adversary states and their agents. Fraud and scams, by contrast, are often categorized as a consumer protection issue or seen as a problem only affecting older Americans. This framing is outdated. Everyone is impacted by scams.

Naming scams as a national security threat dictates who leads the response and where resources go.

For U.S. intelligence agencies and the State Department, a national security threat framing grants authority, funnels resources, allocates budget priorities, and provides the legal basis to defend the U.S. from foreign adversaries. Sample recommendations on deterring scams outlined in the national strategy to prevent scams include:

• The U.S. intelligence community should set goals for preventing and disrupting scams against Americans and exchange actionable scam intelligence with domestic law enforcement agencies.

• The State Department should deploy its diplomatic toolkit and apply sanctions and diplomatic pressure against foreign governments or private parties that allow scam activity to take place within their borders or benefit from scam activity. Notably, there have been successful ongoing efforts to impose sanctions on high-priority targets linked to TCOs in Southeast Asia. For example, the most recent sanctions on 146 targets linked to the Cambodian-operated Prince Group Transnational Criminal Organization were led by the U.S. Department of the Treasury’s Office of Foreign Assets Control, Financial Crimes Enforcement Network (FinCEN), and the United Kingdom’s Foreign, Commonwealth, and Development Office (FCDO).

On the other hand, government officials speaking about scams as a national priority and publicly announcing actions are powerful signals that empower private sector leaders to take action within their institutions. Speaking recently at the Aspen Institute’s United Against Fraud: How America will Defeat Scams event, Markham Erickson, vice president of Government Affairs & Public Policy at the Centers of Excellence at Google, echoed the importance of these signals by government officials:

“The Treasury Department and the State Department announced financial sanctions against gangs in Southeast Asia. That is a wonderful step taken by Secretary Bessent and Secretary of State Marco Rubio. Highlighting this action got the attention of people in my company.”

By elevating scams as a national security threat, the U.S. government can unlock a full arsenal of inter-agency tools and resources to combat TCOs that are currently stealing billions directly out of Americans’ pockets. It also empowers private sector leaders to allocate resources within their global institutions and promotes inter-industry information sharing for a whole ecosystem approach to preventing scams and protecting U.S households.

Scams against Americans fund transnational criminal organizations

Fraud and scams are a critical funding source for TCOs that generate profits to fuel other illicit activities, including human trafficking, drug trafficking, and weapons smuggling. North Korean hackers, Mexican cartels, Russian crime syndicates, and Chinese gangs are among the U.S. adversaries that benefit from scams and other financial crimes. These criminals leverage crypto assets and money mules to facilitate global money laundering.

The U.S. Department of the Treasury’s Office of Foreign Assets Control has imposed sanctions on the following state and non-state sponsored TCOs, including:

• Prince Group Transnational Criminal Organization, linked to the Cambodia-based network led by Chen Zhi that operates a transnational criminal empire through online investment scams.

• Southeast Asian Networks operating in Shwe Kokko, Burma, a notorious hub for virtual currency investment scams under the operational control of the OFAC-designated Karen National Army (KNA), as well as casino shell scam compounds in Cambodia.

• The Zhao Wei Transnational Criminal Organization operating in the elusive scam compound at the border of Myanmar, Laos, and Thailand, also known as The Golden Triangle Special Economic Zone. The TCO is notorious for human trafficking and drug trafficking through underground illicit financing activities via the Kings Romans Casino.

• The Lazarus Group, which has ties to the North Korean government, channels revenues generated from fraud and scams to the regime.

• The Jalisco New Generation Cartel runs scam call centers that finance narcotics trafficking and money laundering.

The scam threat is rapidly evolving

Scam operations, which are often reliant on forced human labor, are increasingly adopting AI tools to enhance their effectiveness and efficiency. In Southeast Asia, scamming has become a profitable domestic industry in states that harbor scam compounds. For example, the Cambodian scam industry generates between $12.5 to $19 billion per year, equivalent to as much as 60 percent of the country’s formal GDP.

Technological innovation provides opportunities for criminal actors to perpetrate new variations of business models that are low risk, low effort, and high profit. The U.S. Intelligence Community’s Annual Threat Assessment recognizes that “profit-motivated transnational criminals are using corruption, intimidation, and enabling technologies to expand their illegal activities into new markets and to diversify their sources of income, which increases their resiliency to U.S. and international law.”

Examples include:

• ‍Criminals employ deepfake technology to impersonate executives or public figures, including Secretary of State Marco Rubio.

• AI-generated images and voice cloning make scams harder to detect, contributing to high-value fraud such as business email compromise (BEC), extortion, and social manipulation.

• TCOs are using crypto exchanges to move money quickly. The Department of Justice filed the largest-ever forfeiture action complaint against approximately 127,271 bitcoin, currently worth approximately $15 billion. The private keys to the unhosted cryptocurrency wallets were held by OFAC-sanctioned Chen Zhi, founder of the Prince Group Transnational Criminal Organization.

• Multi-lingual translation tools and LLMs are being leveraged to scale romance scams. These AI tools are being exploited by criminals to streamline their internal scam compound operations, including reducing the need for human oversight. These tools are also being used to optimize social engineering methods to appear more legitimate by generating fake personas to build trust with victims, tailoring messages with cultural and regional context and translating text quickly and fluently into different languages.

The reality is that scammers steal over $158 billion per year directly out of hardworking Americans’ pockets. The U.S. is facing a national security threat that is evolving rapidly. If government and private sector leaders do nothing, transnational criminal organizations will continue to exploit these gaps to maximize profits. Therefore, a whole-of-ecosystem approach is needed to address the cross-sector nature of this issue.

No single sector can stop scams alone. Elevating scams as a national security threat that our nation prioritizes for prevention will enable all sectors to identify and stop the flow of billions of dollars in illicit financing.

For more detailed recommendations on interagency coordination and corporate anti-scam policies to prevent scams, read: https://fraudtaskforce.aspeninstitute.org/nationalstrategy.