The Week Of: June 29, 2020
This week’s news and stories of interest to the AML community. If you prefer a news roundup plus other AML/KYC content sent to you, subscribe to our weekly newsletter.
Pandemic-related fraud continues unabated
Just like the virus that has enveloped us and shown no signs of slowing down (especially in the U.S.), the fraud it has spawned continues to overwhelm.
Maine’s Labor Department suspects 20,000 unemployment claims overall were likely imposter fraud, while Michigan said it flagged 340,000 claims for investigation, according to Roll Call. The State of Washington announced it recovered $350 million in fraudulent claims.
Meanwhile, the FBI’s Internet Crime Complaint Center said that they were tracking a “massive” spike in hackers using the crisis to target Americans and agencies like the World Health Organization and the Department of Health and Human Services.
The U.S. is not alone. Across the Atlantic, more than £16 million in online shopping fraud was reported to Action Fraud, the national center for reporting cybercrime and fraud within the U.K., since the start of the outbreak there.
In Canada, officials warned consumers of a fake COVID-19 contact-tracing app disguised as official government software, and the Royal Canadian Mounted Police (RCMP) said it was joining police around the world to prevent the Calabrian Mafia from exploiting the pandemic’s economic collapse “to further infiltrate national economic infrastructures.”
As the pandemic rages on, expect fraudsters and other criminals to take advantage of it.
U.S. senators add shell company reporting to defense bill
A bipartisan group of U.S. senators agreed to introduce new transparency rules into the ownership of anonymous shell companies, according to Bloomberg.
The Senate Banking Committee will offer the text as an amendment to the National Defense Authorization Act.
Per the new rules, newly created companies and LLCs would be required to send ownership information to FinCEN, which would maintain a non-public database. Law enforcement could use the information to track possible flows of illicit funds.
Banks would also be able to use the database to check ownership data when onboarding new clients.
Several banking industry groups support the amendment, including the American Bankers Association and the Bank Policy Institute.
U.S. criticized over top anti-trafficking ranking despite failings
Anti-human trafficking advocates criticized the United States for giving itself top marks in an annual report on the crime despite a falling number of prosecutions, according to the Thomson Reuters Foundation.
The U.S. ranked itself Tier 1 out of 4 this year in the State Department’s Trafficking in Persons report, which it has published since 2000. However, the country secured fewer prosecutions, issued fewer visas for victims, and had not done enough to evaluate vulnerable groups for trafficking red flags.
Several anti-trafficking organizations questioned how the United States could maintain the top ranking despite having acknowledged a decline in prosecutions and victim protection – two of three key factors upon which countries are assessed.
“When the United States upgrades undeserving countries and fails to honestly assess its own shortcomings, it loses credibility and the ability to persuade other countries to do better,” the foundation Humanity United said in a statement.
A State Department official countered the criticism by stating the U.S. had shown “serious and sustained efforts for the period in question” and that Tier 1 countries still have room for improvement.