AML Amid COVID-19: Watch out for These FBI-listed Fraud Schemes

3 mins

There has been a rise in the number of cybercrimes and fraud schemes across the globe ever since the proliferation of the COVID-19 pandemic. Criminals, in general, are taking advantage of people’s scare, helplessness, and the need for immediate financial assistance and medical supplies among others. Financial crimes such as money laundering and terrorist financing have a favourable situation to thrive at a time when a great number of working people across the globe are confined to their homes and are using digital means to complete their daily tasks.

Being one of the most affected countries from the pandemic, the US has become a victim of several scams and crimes related to COVID-19. In a recent interview, Steven Merrill, head of the FBI’s Financial Crimes Section, discussed scams and crimes related to the pandemic. “Unfortunately, criminals are very opportunistic. They see a vulnerable population out there that they can prey upon. People are scared and looking for help. People are trying to protect themselves and their families,” Merrill said. He added that people who are looking for medical attention and medical equipment and people who may be unemployed and looking for work may be in an “extra level of desperation” right now, forcing them to make emotional decisions that could make them a victim.

Well-adapted fraud schemes

 Here is the list of the most prevalent fraud schemes related to COVID-19, according to Merrill.  

Government impersonators

In this type of fraud, criminals usually reach out to people through social media, emails, or phone calls pretending them to be government officials. There are also cases where fraudsters are going door-to-door to try to convince victims that they need to provide money for COVID testing, financial relief, or medical equipment, according to Merrill. The criminals may be trying to use phishing or other techniques to hack people’s computers or get their personal information or money.

Fraudulent cures or medical equipment

Fake cures or treatments for the virus are another threat that US is concerned about. These “cures” can be extremely dangerous to people’s health and can even be fatal. Merrill suggests that people should never accept a medical treatment or virus test from anyone other than your doctor, pharmacist, or local health department.

Work-from-home fraud

Work-from-home scams are targeted at people who are at home and out of work due to the COVID-19 situation. Here, criminals contact victims through different channels with job offers and ask for urgent payment in return. In some cases, people are recruited as money mules with the same strategy. Please read more about such a money mule scheme here.

Investment fraud

As regular investment options suffer from drastic value erosion, people may fall for alternative investment schemes that claim to offer exorbitant returns. One of the most lucrative schemes for criminals is offering an opportunity to invest in a cure or treatment for the virus, according to Merrill. Investors who fall for these get-rich-quick schemes will soon find themselves to be fraud victims.

Rising scams and money laundering concerns

 An increasing number of fraud schemes, including the above, will undoubtedly increase money laundering activities. Therefore, banks, governments, and multilateral institutions must be more vigilant and take measures. Many regulators across the globe have realised the challenges that banks and other financial institutions will face in anti-money laundering compliance. Albeit a temporary suspension in the regular supervisory activities, they have instructed financial institutions to stay cautious and suggested certain best practices to counter an expected surge in money laundering operations. Regulators have been stressing on the importance of using modern technology to alleviate the ill effects of the pandemic on financial systems to a great extent.

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Our solution offers the world’s most comprehensive repository of money laundering patterns that we identified from financial institutions and developed in-house with a number of third-party collaborations. Our mammoth library of money laundering patterns will make sure banks don’t miss any suspicious banking activity. Banks can make use of our typologies involving money mules to enable their compliance programs to detect such criminal activity. Our machine learning models learn from multiple customer interactions and apply ensemble learning techniques to predict customer behaviour with accuracy. This gives a 360-degree view of the customers and their network of transactions along with incremental actionable insights into anomalous behaviour, helping detect criminal activities in a faster and auditable manner.

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