For too long, fraud – an illicit economy rivaling the GDP of G20 nations – has been seen as a cost of doing business, a nuisance to be absorbed by banks and consumers. That perception is a dangerous relic.
Modern fraud blends geopolitics with advanced technical tactics, carried out through criminal proxies to target businesses and the public. Yet the global response has remained piecemeal, reactive, and catastrophically inadequate. Fraud is a global security threat, which is why we are launching an international public-private task force in partnership with the US and UK governments and 40 founding members to address it with the urgency it demands.
Industrialization has morphed fraud from petty crime into a strategic tool used by pariahs and gangsters. It subsidizes transnational organized crime and rogue states, undermining the integrity of the global financial system. Cartels run timeshare fraud schemes whilst hostile states increasingly rely on scams and insider fraud networks to supplement their core business models and evade sanctions. Trafficked laborers in Southeast Asia are forced to fuel romance and investment scams. Multinational technology and financial rails are exploited to scale these crimes at breathtaking speed.
Industrialized fraud integrates aspects of asymmetric and economic warfare, inflicting large-scale financial and societal harm while evading conventional defenses. Fraudsters leverage global, industrial-grade tools – bot farms, malware, cryptocurrencies – alongside old-fashioned social engineering, while nations and consumers must guard every vulnerability. Rather than disrupting trade, they drain wealth directly from households. Instead of bombing infrastructure, they erode trust in banks and digital commerce.
North Korea weaponizes cyber-enabled fraud networks to circumvent sanctions and generate revenue, causing significant economic harm while reducing the change of being identified. Global syndicates operate romance and investment scams from enclaves in Myanmar and Cambodia, partnering with militias and corrupt elites in order to funnel proceeds from victims who are invested emotionally and financially. By combining criminal enterprise with geopolitical objectives, this strategy blurs the line between state-sponsored and non-state aggression.
The numbers demand a wakeup call. Nasdaq’s Global Financial Crime Report found $3.1 trillion in illicit funds moved through the global system in 2023, with fraud estimates ranging from $500 billion to over $1 trillion. The costs extend well beyond stolen funds. The same infrastructure that runs romance scams is used for sextortion, drug distribution, human trafficking, and weapons proliferation. “Guarantee markets” like Huione process billions in illicit transactions. Generative AI supercharges fraud: deepfakes, synthetic identities, and automated phishing dramatically cut costs and make attacks far easier to scale.
Technology has expanded the attack surface, giving adversaries unprecedented asymmetric advantages. Fraudsters exploit platforms, messaging apps, and social media to target Americans and Europeans, while financial institutions spend billions on new technology to guard their assets and protect account holders.
Some fintechs provide payment rails that streamline cross-border transfers and bypass regulatory controls. Platforms like Telegram host bazaars for malware, deepfake services, scam websites, and bulk-purchased SIM cards. Hosting and proxy services provide conduits and obfuscation for digital exploits. A multi-tiered infrastructure of deceit spans scam centers, malware, bulletproof hosting, global payment systems, money mules, and shell entities provides scale, sophistication, and layering making industrialized fraud possible.
Fraud networks exploit the gap between a borderless digital world and laws in place within national borders. Malicious actors attack with global reach while hiding behind sovereignty of permissive regimes. They exploit seams between cybersecurity, telecommunications, technology platforms, and the financial sector. Even within banks, silos between cybersecurity, fraud, and anti–money laundering departments create blind spots.
Criminals see this fragmentation as opportunity. Jurisdictional arbitrage, siloed defenses, and slow cross-border processes allow them to operate with impunity. When victims can’t get meaningful recourse, confidence in the financial system erodes. When businesses absorb mounting losses, investment falters. When governments appear powerless, democratic legitimacy suffers.
Understanding fraud as asymmetric warfare reframes it not as isolated financial crime, but as a coordinated assault on trust and economic stability. This should drive strategy beyond piecemeal fixes toward integrated, intelligence-driven countermeasures. If fraud operates as a network, defenses must be equally networked. The cybersecurity model provides a blueprint: real-time intelligence sharing, coordinated incident response, and public-private partnerships. Fraud demands the same investment and urgency, which we are driving under the new ACAMS International Anti-Fraud and Technology Task Force.
Financial institutions and technology platforms must harden payment and identity systems with scalable verification, analytics, and resilience. Governments must build real-time international data-sharing and interdiction capabilities across borders and sectors – banks, social media, telecoms, and payment firms coordinating their response.
Global law enforcement, regulators, diplomats, and multilateral bodies like the UN and Financial Action Task Force should elevate fraud to a strategic priority. To address industrialized fraud’s global nature, we need clear frameworks and measurable commitments for every jurisdiction along the scam supply chain.
The International Anti-Fraud and Technology Task Force represents a critical next phase to accelerate this work, coordinating across international regulators and law enforcement, financial institutions, and technology platforms to make tangible progress across policy, information sharing, capacity building, technology advancements, and public awareness. Without systemic defenses moving faster than fraudsters, we will remain one step behind – exposed, vulnerable, and on the losing side of this shadow war. That changes now.
Carole House serves as a Distinguished Senior Fellow at the Association for Certified Anti-Money Laundering Specialists (ACAMS) and a Senior Fellow at the Atlantic Council GeoEconomics Center. Carole recently departed the White House National Security Council (NSC) as Special Advisor for Cybersecurity and Critical Infrastructure. She previously served as the NSC Director for Cybersecurity and Secure Digital Innovation.
Joby Carpenter is global SME, cryptoassets and illicit finance at ACAMS. He is a global subject matter expert on cryptoassets, illicit finance and emerging threats. Joby has 18 years of experience and expertise in strategic policy making, critical thinking, threat and risk analysis across the U.K. Government, intelligence and regulatory community.