John Zasada, Compliance Consulting Director, Financial Institutions Group

On May 18, 2020, the Financial Crimes Enforcement Network (FinCEN) issued an Advisory FIN-2020-A002 alerting financial institutions to medical scams and the need to file Suspicious Activity Reports (SARs) as a result. The advisory identifies several possible illicit activities financial institutions should be aware of, protect against and report in SARs if required. These illicit activities include medical-related frauds, such as fraudulent cures, tests, vaccines and services. The advisory contains specific red flags indicators of medical-related fraud, as well as case studies of detected medical-related frauds.

Financial institutions filing SARs for these frauds should enter “COVID19 FIN-2020-A002” in SAR field 2 (Filing Institution Note to FinCEN) and the narrative in order to indicate a connection between the suspicious activity being reported and the activities in this advisory. Financial institutions should also select SAR field 34(z) (Fraud – other) as the associated suspicious activity type to indicate a connection between the suspicious activity being reported and COVID-19. Financial institutions should include the type of fraud and/or name of the scam or product (e.g., product fraud – non-delivery scam) in SAR field 34(z).

FinCEN intends to issue several more advisories on financial crimes related to the COVID-19 pandemic. For more information on safeguarding your institution from fraud during the pandemic or keeping up on the needed SARs requirements, contact Doeren Mayhew today.