The Week Of: May 11, 2020
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 chief says virtual currency scams exploiting pandemic fears
Millions of people confined to their homes during the COVID-19 pandemic has led to a growth in virtual currency payment scams, including extortion, ransomware, and fraudulent initial coin offerings, according to Ken Blanco, director of the Financial Crimes Enforcement Network (FinCEN).
Addressing the virtual Consensus Blockchain Conference, Blanco said that cybercriminals have “leverage[d] altered business operations, decreased mobility, and increased anxiety to prey on those seeking critical healthcare information and supplies, including the elderly and infirm.”
Blanco stressed that, because so many corporate and government employees are working remotely, virtual currency businesses need to be vigilant to the vulnerabilities being exploited by cybercriminals to steal sensitive information and compromise transactions.
Treasury extends geographic targeting orders
The Treasury Department will continue its investigation into possible illicit activity in the U.S. real estate market.
First announced in 2016 and extended several times since, the geographic targeting orders (GTOs) were set to expire on May 9; Treasury, via FinCEN, moved that expiration date to November 2020 at the earliest.
The GTOs require U.S. title insurance companies to identify the ultimate beneficial ownership behind shell companies that use all-cash purchases greater than $300,000 in several metropolitan areas: Boston; Chicago; Dallas-Fort Worth; Honolulu; Las Vegas; Los Angeles; Miami; New York City; San Antonio; San Diego; San Francisco; and Seattle.
“GTOs continue to provide valuable data on the purchase of residential real estate by persons possibly involved in various illicit enterprises,” said FinCEN in a statement released on May 8. “Reissuing the GTOs will further assist in tracking illicit funds and other criminal or illicit activity, as well as inform FinCEN’s future regulatory efforts in this sector.”
Global AML czar: ‘Everyone is doing badly
Governments are struggling to fight money laundering despite decades of action, according to David Lewis, executive secretary of the Financial Action Task Force (FATF).
The global AML/CFT watchdog sets international standards to prevent illicit financial activities. Lewis noted that although most countries have laws and regulations based on these standards, “they are rarely being used effectively, or to the extent that we would expect.”
Lewis’ criticisms of worldwide efforts to tackle dirty money are based on the last 10 years of FATF country-evaluation reports, each one providing a detailed assessment of whether a country’s banks, law enforcement agencies, law-makers and regulators are meeting international anti-money laundering standards and how effective they are at stopping illicit money.
“I would sum up the results as ‘everyone is doing badly, but some are doing less badly than others,’” Lewis said in an interview with the International Consortium of Investigative Journalists. He added “there are signs of success in some countries and most now have the tools to do the job” and “we are seeing national efforts go in the right direction but there’s still a long way to go.”