Congressional hearing: scam operations now rival drug trade; lawmakers press DOJ, FBI and FTC for a national strategy and single reporting portal

Federal law‑enforcement and consumer‑protection officials testified at a Joint Economic Committee hearing that industrial‑scale scam operations are inflicting vast financial damage on American households and that advances in artificial intelligence and cryptocurrency are increasing both scale and sophistication.

Senator Hassan, who convened the hearing, told the panel the scams are “an urgent economic danger” that can “empty bank accounts, steal life savings, and disrupt lives,” describing a constituent whose nearly‑80‑year‑old mother lost $80,000 after callers used an AI‑cloned voice to impersonate a family member.

Richard Goldberg, associate counsel in the Justice Department’s fraud section, described a global picture in which Southeast Asian scam compounds recruit and traffic people to operate scams aimed at U.S. victims. He said a leading blockchain‑analysis firm estimated $17 billion in global crypto investment fraud in 2025 and highlighted DOJ efforts including indictments and a high‑value cryptocurrency forfeiture.

Gregory Heb of the FBI said the Internet Crime Complaint Center (IC3) logged more than 450,000 cyber‑scam complaints with reported losses exceeding $17.7 billion in 2025. Heb said adults 60 and older accounted for roughly a quarter of complaints and 42% of the losses reported to IC3, and summarized Operation Level Up, an FBI effort that has notified thousands of victims and identified hundreds of millions in potentially salvaged funds.

Karen Seafford, director of the Scam Center Strike Force at the U.S. Attorney’s Office in D.C., said strike force work focuses on disabling overseas criminal infrastructure, seizing U.S.‑based infrastructure used to facilitate scams, and partnering with industry and foreign law enforcement. She told lawmakers the strike force has frozen, seized, or forfeited roughly $580 million in cryptocurrency tied to scams.

Lois Gman of the Federal Trade Commission described the Consumer Sentinel Network, which collected 3 million fraud reports and $15.9 billion in reported losses in 2025, and explained how FTC uses Sentinel data to build cases and inform public education.

Reva Price of the U.S.‑China Economic and Security Review Commission said her agency’s research estimates scam centers in Burma, Cambodia and Laos generated about $44 billion annually in recent analysis, and warned of potential links between some criminal networks and local political actors.

What lawmakers pressed for

Members used the hearing to press federal agencies and private industry on shortfalls in victim support and coordination. Their priorities included:

- A single federal reporting portal. Multiple witnesses and members described confusion among victims who do not know whether to report to local police, IC3, the FTC’s Sentinel portal, treasury or other sites. Senator Hassan said her bipartisan bill with Senator Rick Scott would create a national portal to forward reports to appropriate federal and state entities and urged agencies to simplify reporting in the interim.

- A governmentwide strategy and common definitions. The Government Accountability Office has urged a governmentwide strategy and a common definition of “scams” so agencies can prioritize risks, standardize data collection, and coordinate responses. GAO testified that the federal response remains reactive and fragmented.

- Stronger private‑sector cooperation with safe harbors. Witnesses said industry cooperation is uneven. Several witnesses urged Congress to clarify duties and provide limited safe harbors so telecoms, platforms and financial firms can share actionable intelligence, take down abusive infrastructure, and deploy blocking or verification technologies.

- Legal and regulatory fixes for digital assets. DOJ and U.S. Attorney’s Office witnesses asked for clearer authority and tools to seize and remit cryptocurrency proceeds to victims more quickly. Panelists described legal friction in seizing web infrastructure and tracing crypto funds, and suggested targeted statutory changes and faster exchanges cooperation to slow suspect transfers.

- Resources for state and local law enforcement and prosecutors. Federal officials and members cited the need to scale training and task‑force models so local police can triage victim reports and coordinate with federal investigations.

Technology, AI and prevention vs. prosecution

Lawmakers and witnesses debated prevention strategies that would stop scam communications or payments before funds leave victims’ control versus prosecution after the fact. Witnesses described several technical approaches—call‑blocking and spoofing prevention (STIR/SHAKEN), platform account‑verification measures, machine‑learning detection of cloned voices, and industry trace‑back groups for telecoms—and urged Congress to coordinate policy and incentives so industry scales those defenses.

Cryptocurrency emerged repeatedly as both a tool for scammers and a point of friction for recovery. Panelists said crypto transactions’ speed and global reach make tracing and freezing proceeds difficult, and recommended regulatory and operational options to incentivize exchanges to slow suspect transfers and better cooperate with law enforcement.

Victim relief and tax fairness

AARP and others urged Congress to reduce additional harm to victims, citing cases where victims later owe federal taxes on stolen funds because current tax rules treat lost funds as taxable income. AARP and witnesses recommended restoring or creating tax relief mechanisms and exploring victim‑restoration funds tied to forfeitures.

What comes next

Witnesses and members urged fast follow‑up: agencies to commit to concrete outreach steps to state/local partners; FTC, DOJ and FBI to continue interagency work directed by the March executive order; and Congress to prioritize a set of statutory fixes (asset‑seizure clarity, reporting portal, liability safe harbors and victim tax relief). Several members signaled bipartisan intent to pursue legislation and to work with agencies on technical and funding needs.

Reporting on this hearing is based on witness testimony and member exchanges. The committee recessed the first panel and convened a second panel with GAO, Aspen Institute and AARP to examine prevention, strategy, and victims’ experience.