Unemployment insurance fraud related to the coronavirus crisis has earned the attention of the Treasury’s financial law enforcement arm, as the agency this week issued an advisory urging financial institutions to be on the alert for the practice.
“Many illicit actors are engaged in fraudulent schemes that exploit vulnerabilities created by the pandemic,” the advisory issued by Treasury’s Financial Crimes Enforcement Network (FinCEN) stated.
The agency said the advisory is based on its analysis of information related to the coronavirus pandemic gleaned from Bank Secrecy Act (BSA) data, open source reporting, and law enforcement partners. It addresses representative types of illicit activity related to unemployment insurance fraud, including: fictitious employer-employee fraud, employer-employee collusion fraud, misrepresentation of income fraud, insider fraud, and identity-related fraud.
Also listed in the advisory are 10 “red-flag” indicators meant to alert financial institutions to fraud schemes targeting unemployment insurance programs, and to help the institutions detect, prevent, and report “suspicious transactions related to such fraud.”
Financial institutions are also directed to specially tag any suspicious activity reports (SARs) filed in conjunction with suspected unemployment insurance fraud to include the term “COVID19 UNEMPLOYMENT INSURANCE FRAUD FIN-2020-A007” in SAR field 2 on the form.