FinCEN Reminds FIs To Watch For Fraud During COVID-19 Crisis

Financial Crimes Enforcement Network

Three weeks after the Financial Crimes Enforcement Network (FinCEN) issued guidance to financial institutions (FIs) on COVID-19, the division of the U.S. Department of the Treasury is reminding lenders to be on the lookout for fraud as the coronavirus grips the nation.

The agency, whose mission is to safeguard the financial system, said compliance with the Bank Secrecy Act (BSA) is the key to keeping the nation safe by fighting money laundering and related crimes, including terrorism and its financing. FinCEN said it expects FIs to continue following a so-called risk-based approach to adhere to the BSA obligations.

FinCEN said it will continue outreach to regulators and banks to ensure compliance with the BSA, and the agency will issue additional new information as needed. The agency has also established a “direct contact mechanism for urgent COVID-19-related issues,” it said.

“FinCEN also appreciates that financial institutions are taking actions to protect employees, their families, and others in response to the COVID-19 pandemic, which has created challenges in meeting certain BSA obligations, including the timing requirements for certain BSA report filings,” the agency said.

In March, FinCEN issued a directive that reminded financial institutions to be on guard for scams, insider trading, and fraud that is common following natural disasters.

Last month, as reported in this space, FinCEN fined Michael LaFontaine $450,000 for failing to intercept breaches of the BSA.

FinCEN said the former executive at U.S. Bank, a subsidiary of U.S. Bancorp, was warned by colleagues and regulators that capping the number of alerts was dangerous and ill-advised. His actions prevented the proper filing of suspicious activity reports which hindered law enforcement’s ability to fully combat crimes and protect people, the agency said.

Investigators found that automated transaction monitoring software U.S. Bank had in place capped the number of alerts, which hindered law enforcement’s ability to spot suspicious activity.



The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.