A Year of Fraud: 2025 Remembered
Welcome to the December 2025 edition of our newsletter! In this issue, we’ll look back on the year in fraud and see what lies ahead.
How Can I Miss You if You Never Leave? Persistent Frauds in 2025
In the three years since artificial intelligence applications have become widely available, their impact on our civilization has continued to evolve. While the tools are used to analyze massive amounts of data in real time, as when it is helping banks identify irregularities such as transfers made in rapid succession, the same tools are often used to help perpetrate frauds. In 2025, the same tools were used to systematically gather personal data from the Internet for use in ever more sophisticated phishing campaigns, also integrating fake social media accounts and deepfake audio or video to craft realistic impersonation schemes, all meant to dupe victims into investing or donating.
As the Internet-fueled fraud bonanza carried on, federal government officials have changed enforcement of fraud and corruption measures in other areas. In February, the White House announced a pause to enforcement of the Foreign Corrupt Practices Act, pausing any new actions for a six-month period and claiming that increasingly aggressive enforcement against the paying of bribes and gratuities by foreign officials had impeded America’s national security. Meanwhile, as cryptocurrencies have proliferated as a supposed investment tool — even being allowed within 401(k) plans in certain limited ways – a U.S. Justice Department memo said the department would seek to end “regulation by prosecution,” saying in part that the department “will no longer target virtual currency exchanges, mixing and tumbling services, and offline wallets for the acts of their end users or unwitting violations of regulations-except to the extent the investigation is consistent with the priorities articulated in the following paragraphs,” outlining that “conduct victimizing investors, including embezzlement and misappropriation of customers’ funds on exchanges, digital asset investment scams, fake digital asset development projects such as rug pulls, hacking of exchanges and decentralized autonomous organizations resulting in the theft of funds, and exploiting vulnerabilities in smart contracts” would continue to be prosecuted, as would cryptocurrency’s use by drug cartels, terrorists, and human trafficking. Bank Secrecy Act violations would no longer be prosecuted “unless there is evidence that the defendant knew of the licensing or registration requirement at issue and violated such a requirement willfully,” and the question of whether cryptocurrencies are commodities or securities would no longer be determined via litigation. These reforms were announced in the name of less regulation and freer market operation, but may make detecting actual crimes more difficult.
A Look at Fraud’s Crystal Ball for 2026
Perhaps unsurprisingly, artificial intelligence and social media are both likely to play key roles in fraud schemes this coming year. The increase in synthetic identity fraud – where real and fake information are blended to create convincing fake records – is likely to continue, and the use of artificial intelligence to create deepfake content – whether supposed grandchild kidnapping phone calls or political ads – may unleash a torrent of uncertainty.
For companies, some of the challenges are clear, and the best solutions remain a bit old fashioned. In recent years, our work has found an increase in the use of “diploma mills,” often by accomplished professionals who wish they had a doctorate, but didn’t pursue the coursework. The quality of the forgeries has been elevated as technology advances, but most of these operations use the names of long-dead university officials on the actual degree itself, so if your client has any doubts about the validity of a degree, license, or other credential, diligent efforts to uncover the truth are always the best option.
Truth itself continues to be under assault from politicians and social media, and examining claims a potential employee or vendor has made on social media, or posts about them made by others, may become an ever more relevant step in the years ahead, complementing the traditional public records-focused due diligence approach.