The Week Of: December 9, 2019
This week’s news and stories of interest to the AML community. If you prefer a news roundup sent to you, subscribe to our weekly newsletter.
FinCEN reports rise in elder financial exploitation
The number of suspicious activity reports involving elder financial abuse filed by U.S. financial institutions has tripled over the past six years according to a report published by the Financial Crimes Enforcement Network (FinCEN).
Monthly SARs filings grew to 7,500 in August of this year, up from 2,000 in October 2013, while the dollar volume ballooned from $2.2 billion in 2014 to $5 billion in 2018. FinCEN noted in its report that the increase may be due to greater awareness of the problem.
Seniors are particularly vulnerable to financial abuse, often by family members or other caregivers. The Consumer Financial Protection Bureau estimates that victims over age 70 lost an average of $42,000 between 2013 and 2017.
Read more at Forbes.
Global regulators fight money muling
The fight against money muling has gone global. Last week, the U.S. Justice Department announced “a concentrated effort across the country and around the world to halt money mule activity.”
In the U.S., law enforcement disrupted the activities of more than 600 money mules over a two-month period; it also tripled the number of prosecutions brought against mules compared to a similar initiative that took place last year.
At the same time, Europol announced efforts by law enforcement across 31 countries that resulted in the identification of more than 3,800 money mules, of which 228 were arrested.
A money mule is a person who receives money from a third party in their bank account and transfers it to another one or takes it out in cash and gives it to someone else. Mules participating in the scheme will take a commission; others take part unknowingly.
More than 90% of money mule transactions identified through the European Money Mule Actions are linked to cybercrime, said Europol, including phishing, malware attacks, business e-mail compromise (BEC) and CEO fraud, romance scams, and others.
$4.4 billion lost to cryptocurrency thefts and scams in 2019
Blockchain analytics firm CipherTrace reports that $4.4 billion has been lost to fraudulent activities within the cryptocurrency industry so far in 2019.
In its Q3 Cryptocurrency Anti-Money Laundering (AML) Report, the company also found that the vast majority of popular crypto exchanges have “poor or porous” Know Your Customer policies. It noted that exchanges were caught flat footed when the Financial Action Task Force (FATF) recommended governments adopt stricter regulations for virtual assets service providers (VASPs), including enforcement of the Travel Rule which requires VASPs share customer information whenever crypto assets in excess of $1,000 are transferred.
“[T]he majority of exchanges are not equipped to handle basic KYC, let alone comply with the stringent new funds ‘Travel Rule’ included in the updated FATF guidance,” said CipherTrace in a press release.