US Treasury Shares Tips On Spotting Money Mule And Imposter Scams

US Treasury Shares Tips On Spotting Money Mule And Imposter Scams

The U.S. Financial Crimes Enforcement Network (FinCEN) today has issued a security alert designed to share potential indicators of imposter scams and money mule schemes with U.S. financial institutions.

FinCEN, which is a bureau of the U.S. Department of the Treasury, says that fraudsters are actively engaged in exploiting vulnerabilities created by the COVID-19 pandemic.

The advisory provides detailed descriptions of what imposter scams and money mule schemes are, a series of financial red-flag indicators that can be used for detecting them, and info needed by financial orgs to report such suspicious activity.

FinCEN’s mission is to combat money laundering and connected crimes including terrorism, and to safeguard national security by collecting, analyzing, and sharing financial intelligence with dozens of intelligence agencies including the DEA, the FBI, the IRS, and the U.S. Secret Service.

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The financial red flags of money mule schemes and imposter scams included in today’s advisory are directed at Chief Executive Officers, Chief Operating Officers, Chief Compliance Officers, Chief Risk Officers, AML/BSA departments, legal departments, Cyber and Security departments, Customer Service Agents, and bank tellers.

Financial institutions can use the indicators sourced from Bank Secrecy Act (BSA) data, open-source reporting, and law enforcement partners to detect, prevent, and report fraudulent financial activities (potentially related to the pandemic).

In imposter scams, fraudsters try to coerce their targets into handing over personal information or funds by impersonating government agencies or well-known organizations.

As part of money mule schemes, individuals (unwitting, sitting, or complicit) are recruited by criminals running fraud schemes to help transfer illegally acquired money or to exploit loopholes in financial assistance programs such as unemployment insurance to file fraudulent claims.

The Federal Bureau of Investigation (FBI) yesterday also issued an alert about a spike in fraudulent unemployment insurance claims filed using stolen personally identifiable information (PII). 

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Financial orgs urged to file reports

FinCEN’s list of financial red flag indicators to be used to detect imposter scams and money mule schemes is quite extensive and is included as part of the U.S. Treasury bureau’s “Advisory on Imposter Scams and Money Mule Schemes Related to Coronavirus Disease 2019 (COVID-19).”

“As no single financial red flag indicator is necessarily indicative of illicit or suspicious activity, financial institutions should consider additional contextual information and the surrounding facts and circumstances, such as a customer’s historical financial activity, whether the transactions are in line with prevailing business practices, and whether the customer exhibits multiple indicators, before determining if a transaction is suspicious or otherwise indicative of potentially fraudulent COVID-19-related activities,” FinCEN adds.

Financial institutions who identify COVID-19-related financial crimes using these indicators are also urged to file Suspicious Activity Reports (SAR) referencing FinCEN’s advisory.

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