John Zasada, Compliance Consulting Director, Financial Institutions Group

On March 16, 2020, the Financial Crimes Enforcement Network (FinCEN) issued a press release advising financial institutions to be alert to potential illicit behavior and fraud associated with COVID-19. FinCEN identified four emerging troubling trends:

  • Imposter Scams – Bad actors attempt to solicit donations, steal personal information or distribute malware by impersonating government agencies, international organizations or health care 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 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 making 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.

FinCEN indicated that for suspected suspicious transactions linked to COVID-19, along with checking the appropriate suspicious activity report-template (SAR-template) box(es) for certain typologies, financial institutions should enter “COVID19” in Field 2 of the SAR-template.