National emergencies, such as the current COVID-19 situation, can effect everyone in dozens of ways. Not often considered is the increase of financial crime by bad actors hoping to take advantage of a bad situation. Even in the best of times, financial crime is always present. When reporting and regular business is interrupted, the crime could become worse. Trends of COVID-19 financial crimes are already emerging and may only increase in severity and frequency. The Financial Crimes Enforcement Network (FinCEN) urges financial institutions to communicate any delays in required BSA reports and warns of malicious/fraudulent transactions.
FinCEN has been monitoring the situation and has identified four 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)), 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.
- 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.
- Insider Trading – FinCEN has received reports regarding suspected COVID-19-related insider trading
COVID-19 financial crimes are another worry for global markets. FinCEN advises financial institutions to stay diligent and be aware of any updates.
Read the FinCEN release in it’s entirety.