diff --git a/blockchain_development_integration/pi_network/components/fraud_detection/fraud_detection.py b/blockchain_development_integration/pi_network/components/fraud_detection/fraud_detection.py
new file mode 100644
index 000000000..a2748e218
--- /dev/null
+++ b/blockchain_development_integration/pi_network/components/fraud_detection/fraud_detection.py
@@ -0,0 +1,9 @@
+# fraud_detection.py
+import pandas as pd
+from sklearn.ensemble import IsolationForest
+
+def detect_fraud(transactions):
+    model = IsolationForest(contamination=0.01)
+    model.fit(transactions[['amount', 'time', 'location']])
+    transactions['is_fraud'] = model.predict(transactions[['amount', 'time', 'location']])
+    return transactions[transactions['is_fraud'] == -1]