US Treasury Warning: Beware of COVID-19 Financial FraudFinancial Crimes Enforcement Network Advises Banks to Be on the Lookout for Scams
The U.S. Treasury’s Financial Crimes Enforcement Network is alerting financial institutions about surging COVID-19 themed scams and other “illicit activities,” ranging from medical-related fraud involving the sale of fake cures, tests and vaccines to price gouging for supplies.
FinCEN notes that its alert issued Monday is the first of several advisories the agency intends to issue concerning financial crimes related to the COVID-19 pandemic.
”These advisories are based on FinCEN’s analysis of COVID-19-related information obtained through public reports, Bank Secrecy Act data, and law enforcement partners,” the agency notes. ”FinCEN will issue financial analyses and intelligence, as appropriate, to financial institutions to help them detect, prevent, and report suspected illicit activity.”
FinCEN also has temporarily expanded its Rapid Response Program, which supports law enforcement and financial institutions in the recovery of funds stolen via fraud, theft and other financial crimes, now including those related to COVID-19.
FinCEN’s advisory contains a list of red flags, descriptions and examples of three main types of COVID-19-related scams and offers information on reporting suspicious activity.
“BSA data, as well as information from other federal agencies, foreign government partners and public sources, indicate possible illicit activities related to the COVID-19 pandemic regarding fraudulent cures, tests, vaccines, and services; nondelivery scams; and price gouging and hoarding of medical-related items, such as face masks and hand sanitizer,” FinCEN notes.
”As no single red flag 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 fraudulent COVID-19-related activities,” the alert notes.
FinCEN notes that medical-related fraud scams, including fake cures, tests, vaccines and services, may require customers to pay via a pre-paid card instead of a credit card; require the use of a money services business or convertible virtual currency; or require that the buyer send funds via an electronic funds transfer to a high-risk jurisdiction.
The agency notes that scams involving nondelivery of medical-related goods often occur through websites, robocalls or on the darknet.
Scams involving price gouging include cases where individuals have been selling surplus items or newly acquired bulk shipments of goods - such as masks, disposable gloves, isopropyl alcohol, disinfectants, hand sanitizers, toilet paper and other paper products - at inflated prices, FinCEN explains. “Payment methods vary by scheme and can include the use of pre-paid cards, money services businesses, credit card transactions, wire transactions, or electronic fund transfers,” it notes.
Of course, COVID-19 related financial scams are not just a U.S. problem.
Earlier this month, the Australian Institute of Criminology said an investigation found more than 200 fraudulent listings for pandemic-related products, which include sought-after personal protective equipment, anti-viral medicine and other pharmaceuticals that have been floated as possible treatments for COVID-19 (see Darknet Markets Push Fake Coronavirus Vaccines, Test Kits).
COVID-19 schemes have also been hitting many sectors of the economy worldwide (see Spoofed Website Templates Help Spread COVID-19 Scams: Report).
For instance, U.S. and international agencies have warned about a surge of coronavirus-themed phishing and ransomware attacks hitting healthcare entities as well as organizations in other sectors (see No COVID-19 Respite Ransomware Keeps Pummeling Healthcare).
In addition, institutions involved in COVID-19 medical research and even nonprofit and nongovernmental organizations are being targeted by cybercriminals and hacker gangs with motives ranging from theft of intellectual property to disruption of operations.
More to Come
”FinCEN is correct in its assertion that there will be a huge increase in all types of cybercrimes, especially related to medical scams and related cyberattacks, says former FBI agent Jason G. Weiss, an attorney at the law firm Faegre Drinker Biddle & Reath LLP.
“Fear is the greatest motivator of the criminal element because scared people tend to panic easier and make simpler mistakes, opening themselves up to even more devastating cyberattacks for themselves, their families or their businesses. Cyber preparedness and awareness are the great remedies to these cyber maladies. In times as difficult as today, between a struggling economy and a worldwide pandemic, people will really need to dig deep and prepare themselves against cyberattacks.”