Kristen Smith 
State and local governments are facing identity fraud challenges as criminal groups adopt agentic artificial intelligence to automate attacks and overwhelm legacy verification systems, said identity verification company Socure in an article published on GovTech.
The surge in AI-enabled fraud described by Socure highlights just how quickly artificial intelligence is reshaping both opportunity and risk for the public sector. At the 2026 Artificial Intelligence Summit on March 19, federal and industry leaders will dig into the advances driving this shift and the safeguards needed to keep pace with autonomous threats. Register now to join the conversation shaping the future of AI in government.
How Is AI Changing the Speed and Scale of Fraud?
Socure’s 2025 report stated that organized fraud rings accounted for 12 percent of all applications submitted to government programs, with a quarter of those attempts targeting multiple agencies. The emergence of autonomous, rogue AI agents has shifted identity fraud from human-paced activity to machine-speed operations.
“There are fraud rings and nation state actors in all countries, and they’re finding ways to intercept and disrupt government benefit programs,” said Jordan Burris, Socure’s vice president for the public sector.
What Identity Threats Are Governments Confronting?
According to Socure’s analysis, fraud networks are using AI agents to generate deepfakes, forged documents and fraudulent profiles without ongoing human input. While AI tools enable faster generation of synthetic identities, Socure found that fraudsters remain four times more likely to rely on stolen identity data, underscoring the continued threat of compromised personally identifiable information.
Criminals are also targeting digital hiring initiatives, using AI-generated personas to pose as job candidates to gain insider access to organizations.
What Defenses Does Socure Recommend?
With knowledge-based authentication increasingly unreliable due to widespread PII exposure, Socure’s report urges agencies to adopt identity protections that account for both the velocity and sophistication of AI-enabled attacks.
The recommended steps focus on enhancing fraud detection and response capabilities. One key recommendation is to deploy AI-driven identity intelligence. This involves implementing real-time risk scoring, behavioral analytics, device intelligence and application velocity monitoring to identify anomalous activity as it occurs. Furthermore, agencies should prioritize updating credentialing systems by introducing secure digital credentials, such as mobile driver’s licenses and verified digital wallets, which can be quickly revoked if compromised. Agencies are also encouraged to strengthen interagency collaboration, focusing on sharing fraud intelligence and coordinating cross-jurisdictional investigations to effectively track emerging fraud patterns.
Socure stresses that agencies must balance fraud deterrence with fair access, ensuring prevention measures do not create unnecessary barriers for legitimate users, including individuals with limited credit histories.
