FinCEN Encourages FIs to Communicate Concerns Related to COVID-19 and to Remain Alert to Related Illicit Suspicious Activity

  • Source: fincen.gov 

Treliant Takeaway:

COVID-19 has already put stress on compliance officers and their risk management programs.  With any crisis comes more risk.  Fraudsters, money launderers, and terrorists are already leveraging the COVID-19 crisis to probe for weak points in the system.  Treliant has the experience and resource capabilities to help financial institutions and their compliance officers to sustain their programs, assess increased risks, and help mitigate those risks.

Article Highlights:

In addition to encouraging financial institutions to keep FinCEN and their functional regulators informed of concerns surrounding potential delays in their ability to file Bank Secrecy Act reports, FinCEN also advised 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:

  1. 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), or healthcare organizations.
  2. 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.  Additionally, FinCEN has received reports regarding fraudulent marketing of COVID-19-related supplies, such as certain facemasks.
  4. Insider Trading – FinCEN has received reports regarding suspected COVID-19-related insider trading.

Author

Ross Marrazzo

Ross Marrazzo is Managing Partner of Treliant. He is also responsible for the firm’s Corporate & Regulatory Compliance and Global Financial Crimes Compliance services areas. Ross has over 34 years of domestic and international experience in the design, oversight, and assessment of corporate and regulatory compliance, Anti-Money Laundering/Bank Secrecy Act,…