The Financial Crimes Enforcement Network (FinCEN) just issued a release, entitled “The Financial Crimes Enforcement Network (FinCEN) Encourages Financial Institutions to Communicate Concerns Related to the Coronavirus Disease 2019 (COVID-19) and to Remain Alert to Related Illicit Financial Activity.” Given the topic and the simplicity of the release, this post merely provides the release in its entirety (including its footnotes and related links), without commentary — other than to sadly observe that whenever widespread and severe misery occurs, human nature apparently produces a 100% likelihood that fraudsters will exacerbate the situation by trying to scam people when they are most vulnerable.
The release states:
On March 13, 2020, President Trump declared a National Emergency in response to COVID-19.1 FinCEN requests financial institutions affected by the COVID-19 pandemic to contact FinCEN and their functional regulator as soon as practicable if a COVID-19-affected financial institution has concern about any potential delays in its ability to file required Bank Secrecy Act (BSA) reports. Financial institutions seeking to contact FinCEN should call FinCEN’s Regulatory Support Section (RSS) at 1-800-949-2732 and select option 6 or e-mail at FRC@fincen.gov. FinCEN’s RSS will continue to be available to support financial institutions for the duration of the COVID-19 pandemic.
Financial institutions are encouraged to keep FinCEN and their functional regulators informed as their circumstances change.
FinCEN also advises financial institutions to remain alert about malicious or fraudulent transactions similar to those that occur in the wake of natural disasters. FinCEN is monitoring public reports and BSA reports of potential illicit behavior connected to COVID-19 and notes the following emerging trends:
- Imposter Scams – Bad actors attempt to solicit donations, steal personal information, or distribute malware by impersonating government agencies (e.g., Centers for Disease Control and Prevention), international organizations (e.g., World Health Organization (WHO)2), or healthcare organizations.
- Investment Scams – The U.S. Securities and Exchange Commission (SEC) urged investors to be wary of COVID-19-related investment scams, such as promotions that falsely claim that the products or services of publicly traded companies can prevent, detect, or cure coronavirus.3
- Product Scams – The U.S. Federal Trade Commission (FTC) and U.S. Food and Drug Administration (FDA) have issued public statements and warning letters to companies selling unapproved or misbranded products that make false health claims pertaining to COVID-19.4 Additionally, FinCEN has received reports regarding fraudulent marketing of COVID-19-related supplies, such as certain facemasks.
- Insider Trading – FinCEN has received reports regarding suspected COVID-19-related insider trading.
In addition, please see FinCEN’s advisory, FIN-2017-A007 “Advisory to Financial Institutions Regarding Disaster-Related Fraud” (October 31, 2017) for descriptions of other relevant typologies, such as benefits fraud, charities fraud, and cyber-related fraud.5 For suspected suspicious transactions linked to COVID-19, along with checking the appropriate suspicious activity report-template (SAR-template) box(es) for certain typologies, FinCEN also encourages financial institutions to enter “COVID19” in Field 2 of the SAR-template.
Financial institutions are encouraged to review information from other relevant functional regulators as updates are available. FinCEN will continue to monitor this situation and will release updated information for financial institutions as appropriate.
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[1] Remarks by President Trump, Vice President Pence, and Members of the Coronavirus Task Force in Press Conference: https://www.whitehouse.gov/briefings-statements/remarks-president-trump-vice-president-pence-members-coronavirus-task-force-press-conference-3/.
[2] WHO statement concerning imposter scams: https://www.who.int/about/communications/cyber-security.
[3] SEC Notice on COVID-19 related investment scams: https://www.sec.gov/oiea/investor-alerts-and-bulletins/ia_coronavirus.
[4] FTC and FDA joint updated statement concerning product scams: https://www.consumer.ftc.gov/blog/2020/03/ftc-fda-warnings-sent-sellers-scam-coronavirus-treatments.
FDA statement concerning product scams: https://www.fda.gov/consumers/health-fraud-scams/fraudulent-coronavirus-disease-2019-covid-19-products.
[5] FIN-2017-A007- Advisory to Financial Institutions Regarding Disaster-Related Fraud (October 31, 2017): https://www.fincen.gov/sites/default/files/advisory/2017-10-31/FinCEN%20Advisory%20FIN-2017-A007-508%20Compliant.pdf.
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