New FinCen Guidance for Financial Institutions Relating to COVID-19
The first of a series of guidance it intends to release on financial crimes related to the COVID-19 crisis
The Financial Crimes Enforcement Network (FinCen) has issued a guidance aimed at financial institutions, for what it says will be the first of a series of guidance it intends to release on financial crimes related to the COVID-19 crisis. The guidance includes examples of red flags for each of these illicit activities, some are unique indicators but many are also similar to typical red flags of fraudulent merchant activity committed by shell or fraudulent retail or wholesale business operators. FinCen notes that not one red flag is dispositive, and financial institutions should, before determining if a transaction is suspicious or indicative of fraudulent COVID-19 related activity, consider additional contextual information, 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.
Some medical-related scams FinCen identified include: (1) fraudulent cures, tests, vaccines, and services; (2) non-delivery scams; and (3) price gouging and hoarding of medical-related items, such as face masks and hand sanitizer.
Financial institutions should review the red flags and case studies in the FinCen guidance and incorporate as appropriate into their training for staff, policies, and transaction monitoring procedures.
This article is intended to provide information of an educational nature and is not to be construed as the rendition of legal advice or a legal opinion and does not create an attorney-client relationship that is not otherwise already in existence between you and CORBUS LAW. No warranties, representations or claims of any kind with respect to any of the materials or information on this article, including without limitation the accuracy, completeness, and suitability for any purpose of this information, is made by CORBUS LAW. This article may contain some links to other websites or documents which CORBUS LAW does not endorse, approve, or control, and is therefore not responsible for their content. In accessing these websites and documents, you are subject to their terms, conditions, and policies. Readers should not act upon the information contained in this article without seeking the advice of legal counsel of their choosing for advice regarding their individual situation Pursuant to the rules of certain jurisdictions, this article may constitute Attorney Advertising.