The U.S. Treasury Department warned financial institutions Tuesday of nearly a dozen indicia that clients may be stealing government subsidies intended for individuals that have lost their jobs amid the novel coronavirus pandemic.
Customers receiving unemployment insurance payments in a state where they do not work or live, using cashier’s checks or prepaid cards to withdraw their assistance in lump sums, or quickly wiring the funds overseas after their disbursal may warrant closer scrutiny, the department’s Financial Crimes Enforcement Network claimed in a 4-page advisory.
“As unemployment claims in the United States have surged due to the pandemic, U.S. law enforcement and financial institutions have detected numerous instances of COVID-19-related UI fraud,” FinCEN noted in the advisory, which draws on the bureau’s own analysis of pandemic related transactional data from financial institutions, investigators and public sources.
Multiple accounts held at different banks under the same “free, web-based” email address that receive UI funds simultaneously, as well as dormant or newly opened accounts that suddenly start accepting multiple such deposits, may also indicate fraud, FinCEN warned.
Around 64 million U.S. workers have applied for state or federal unemployment benefits at one point or another in the seven months from mid-March to mid-October amid widespread business closures during the pandemic, according to the Peter G. Peterson Foundation in New York.
By May, weeks after the first disbursals of the funds were made, the FBI began tackling an uptick in unemployment benefits fraud, ACAMS moneylaundering.com reported at the time, citing a senior law-enforcement official.
Persons receiving unemployment benefits into accounts where the names do not match those of who applied for the funds should draw attention, as should individuals who, for example, file an unemployment request “on the East Coast and get paid on a West Coast account” the FBI official said in an online discussion in May. “Those are huge red flags.”
UI fraud has taken several forms since the beginning of the pandemic, FinCEN noted Tuesday. In one variation, employees collude with their employers to continue receiving reduced pay under the table while also taking benefits, while, in another, workers return to their jobs but continue receiving unemployment payments by not reporting their income.
FinCEN has issued multiple guidance documents pertaining to COVID-19 since the pandemic began in earnest in the U.S. in March.
In April, the bureau issued a list of frequently-asked-questions on government-subsidized loans for struggling small businesses and followed the next month with an advisory on the peddling of nonexistent medical masks, sales of fake cures and other healthcare-related fraud.
A July 7 advisory that listed red flags of criminals attempting to exploit the health crisis included three indicia of UI fraud: an account receiving unemployment payments for multiple employees, a single employee receiving several payments from different states or several payments going to the same employee from a state where he or she does not reside or work.
FinCEN asked institutions to include that 8-page advisory’s formal title, “COVID19 MM FIN-2020-A003,” when filing a suspicious activity report.
Three months later, FinCEN Director Ken Blanco told attendees of the ACAMS Virtual Las Vegas Conference to include “COVID19 UNEMPLOYMENT INSURANCE FRAUD” in any SARs flagging such schemes. Tuesday’s advisory separately asks filers to write “COVID19 UNEMPLOYMENT INSURANCE FRAUD FIN-2020-A007” in relevant submissions.
“It would be helpful if this [latest] advisory referenced the other “required” phrases and made it clear that this most recent is the only one to use,” Jim Richards, former chief of Bank Secrecy Act compliance at Wells Fargo, wrote in an email to moneylaundering.com.
Contact Valentina Pasquali at email@example.com
|Topics :||Anti-money laundering , Know Your Customer , Fraud|
|Document Date:||October 13, 2020|