Treasury's Crime Unit Warns of Insider Trading, Fraud Related to Virus

Financial institutions should be on alert about malicious or fraudulent transactions similar to those that occur in the wake of natural disasters, FinCEN warns,

FinCEN, which is monitoring public reports and BSA reports of potential illicit behavior connected to COVID-19, notes the following 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), or health care organizations.
• Investment Scams – The Securities and Exchange Commission 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 Federal Trade Commission and Food and Drug Administration 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.

FinCEN urged financial institutions to review its advisory, FIN-2017-A007 “Advisory to Financial Institutions Regarding Disaster-Related Fraud” for descriptions of other relevant typologies, such as benefits fraud, charities fraud and cyber-related fraud.

For suspected suspicious transactions linked to COVID-19, along with checking the appropriate suspicious activity report template boxes for certain typologies, FinCEN also encourages financial institutions to enter “COVID19” in Field 2 of the template.

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