The Tax Times: White Collar Enforcement After Pullback Under President Trump

Recent data show that anti–money laundering (AML) fines in the U.S. fell from roughly $4.3 billion in 2024 to about $2.0 billion in 2025, a 54% decline that mirrors broader reports of a 58–61% drop in U.S. AML penalties as enforcement capacity shrank. At the same time, IRS Criminal Investigation cases targeting abusive tax schemes reportedly slid from 92 in 2024 to just 34 in 2025, a 63% fall and well below prior‑decade norms, even as IRS-CI continued to identify billions in tax fraud overall.

According to lawmakers, roughly 25,000 federal agents and career prosecutors who had previously focused on white collar matters were reassigned to immigration enforcement after January 2025, leaving many financial crime units “understaffed, under-resourced, and in some cases gutted.” This resource shift, paired with clemency that wiped out an estimated $1.3 billion in white collar restitution and fines, has been characterized by advocates as an extraordinary break from historic enforcement practice rather than a routine policy reprioritization.

Expert Warnings: Impunity Risk In A High‑Threat Era

Policy advocates and former enforcement officials warn that cutting back on complex financial investigations at this moment sends a dangerous signal of impunity in a global environment where financial crime risk is rising. Fenergo’s global data show total AML-related penalties fell 18% worldwide in 2025, but U.S. penalties dropped far more steeply than those in Europe and Asia, underscoring how much of the downturn is driven by U.S. resourcing and policy choices rather than a genuine fall in misconduct.

Experts highlight that technology is amplifying risk on multiple fronts: cryptocurrency has become mainstream and remains a powerful magnet for illicit finance, while rapid advances in artificial intelligence promise new tools for fraud, sanctions evasion and sophisticated laundering schemes. Against that backdrop, veteran regulators argue that pulling back experienced investigative staff and signaling leniency through pardons could embolden bad actors at home and abroad.

According to Law360 Money laundering-related fines and tax fraud investigations plummeted last year as President Donald Trump shifted federal agents away from combating financial crime to focus on the immigration crackdown, according to recent reports that have raised alarms among experts about the state of white collar enforcement in the U.S.:

FATF Scrutiny And The Risk Of A “Gray List”

This enforcement retreat coincides with the most significant review of U.S. AML defenses in a decade, as the Financial Action Task Force (FATF) conducts a full evaluation of U.S. compliance with global anti–money laundering and counter‑terrorist financing standards. FATF assessors are examining not just laws on the books but how effectively the U.S. uses those tools to detect, investigate and punish financial crime.

Advocates in the Financial Accountability and Corporate Transparency Coalition (FACT) warn that if the U.S. is viewed as failing to enforce its own rules, it could face a form of reputational downgrade similar to “gray‑listing,” in which jurisdictions are placed under enhanced monitoring for strategic deficiencies in their AML regimes. While gray‑listing is typically associated with smaller or emerging markets, being perceived as a weak link would make cross‑border banking and correspondent relationships more burdensome and could raise the cost and complexity of transacting through U.S. channels.

Congressional Pushback And DOJ’s Response

Alarmed by the trends, 27 Democratic lawmakers sent a January letter to federal inspectors general urging investigations into how the reallocation of roughly 25,000 agents away from white collar and corporate crime has affected fraud, tax evasion and money laundering enforcement. A separate letter from seven senators to Treasury Secretary and acting IRS Commissioner Scott Bessent and IRS-CI Chief Guy Ficco pressed for answers on the steep falloff in abusive tax scheme probes, which dropped 63% year‑over‑year and now sit about 40% below any other year in the last decade.

The U.S. Department of Justice has maintained publicly that assisting with immigration enforcement has not prevented it from successfully investigating and prosecuting white collar crime, pointing to ongoing work in areas such as healthcare fraud and False Claims Act litigation. DOJ’s Criminal Division also installed a new Assistant Attorney General in December and a new Fraud Section chief in January, changes some practitioners interpret as a sign of renewed stability and potential rebuilding of depleted white collar ranks.

How The Shift Is Reshaping White Collar Practice

On the ground, white collar defense lawyers report that active federal investigations have stalled or gone quiet, often after key agents left or teams were thinned out, leading some matters to “wither on the vine” rather than progress to charges. In response, many practitioners are pivoting from traditional criminal defense to a heavier mix of civil litigation, compliance counseling and internal investigations as demand shifts away from full‑scale criminal prosecutions.

Despite the downturn in AML penalties and tax scheme prosecutions, enforcement remains robust in pockets such as healthcare fraud, pandemic‑related benefit fraud and certain high‑profile bank and crypto cases, where penalties continue to reach into the hundreds of millions. Looking ahead, practitioners say the key questions are whether the administration will reallocate agents back to financial crime, how DOJ’s new leadership will prioritize corporate enforcement, and what signal FATF and global markets will send about the U.S.’s willingness to police money flows through its financial system.

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