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FinCEN Publishes Advisory on Medical Scams Related to COVID-19 and Companion Notice with Filing Instructions for Financial Institutions

On May 18, 2020, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) published an advisory to alert financial institutions to rising medical scams related to the Coronavirus Disease 2019 (COVID-19) pandemic, and a notice with detailed instructions for filing COVID-19 related suspicious activity reports.  The advisory contains descriptions of COVID-19-related medical scams, case studies, red flags, and information on reporting suspicious activity.  FinCEN has expressed that it intends to issue additional guidance concerning financial crimes related to the COVID-19 pandemic to help financial institutions detect, prevent, and report suspected illicit activity.

FinCEN reminds financial institutions that the reporting of suspicious activity, together with effective implementation of due diligence requirements, is critical to identifying possible financial crimes.  Financial institutions should provide all pertinent available information in the Suspicious Activity Report (SAR) form and narrative, and adhere to the following filing instructions to assist FinCEN and law enforcement in effectively identifying and pulling actionable SARs and information to support COVID-19-related cases:

  • Include a reference to the advisory in SAR field 2 (Filing Institution Note to FinCEN) by adding “COVID19 FIN-2020-A002” and indicate in the SAR narrative a connection between the suspicious activity being reported and the activities highlighted in the advisory.

  • Select SAR field 34(z) (Fraud - other) as the associated suspicious activity type to indicate a connection between the suspicious activity being reported and COVID-19.  Financial institutions should include the type of fraud and/or name of the scam or product in SAR field 34(z).

  • Include a reference to COVID-19 in the SAR narrative only if the suspicious activity reported is specifically related to COVID-19 (the SAR narrative should not discuss the financial institution’s SAR filing challenges during the pandemic).

FinCEN also reminds financial institutions that there are a variety of U.S. government agencies positioned to assist in investigating and combating COVID-19-related criminal activity and that, in addition to a SAR filing, financial institutions should consider reporting: (i) COVID-19-related fraud schemes to the U.S. Department of Justice, (ii) cyber-and Internet-related crime to the Federal Bureau of Investigation, (iii) identity theft and fraud to the Federal Trade Commission and Social Security Administration, and (iv) fraud involving payment of federal taxes to the U.S. Treasury Inspector General for Tax Administration.  FinCEN also encourages financial institutions to share information under the safe harbor authorized by section 314(b) of the USA PATRIOT Act, and stresses that information sharing is critical to identifying, reporting, and preventing evolving fraud schemes, including those related to COVID-19.

Financial institutions should consider enhancing their anti-money laundering monitoring systems to incorporate the red flags identified in the advisory as well as other published guidance discussing COVID-19-related schemes (see, for example, FBI guidance issued on April 6, 2020, regarding money mule schemes exploiting the COVID-19 pandemic).  Financial institutions should be prepared to continuously update their monitoring systems as new COVID-19-related schemes and red flags are identified by regulators and law enforcement.

©2020 Greenberg Traurig, LLP. All rights reserved.

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About this Author

Carl Fornaris, Greenberg Traurig Law Firm, Miami and Washington DC, Finance and Corporate Law Attorney
Shareholder

Carl A. Fornaris is an attorney in firm's Financial Regulatory and Compliance Practice. With 24 years of legal experience, Carl advises banks and their holding companies, investment advisers, securities broker dealers, gaming firms, money services businesses and other financial institutions on all aspects of their business. These include  licensing, capital-raising transactions, acquisitions and divestitures, USA PATRIOT Act/BSA/AML compliance and OFAC sanctions programs (including permissible financial activities in Cuba), critical examination reports and enforcement...

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Kyle R. Freeny Shareholder Anti-money laundering issues Bank Secrecy Act Anti-corruption, Foreign Corrupt Practices Act, Asset forfeiture, Foreign Agents Registration Act FARA, Government investigations,Compliance counseling
Shareholder

Kyle R. Freeny, a skilled trial attorney and former federal prosecutor for the Special Counsel’s Office and the Department of Justice (DOJ), Criminal Division’s Money Laundering and Asset Recovery Section (MLARS), focuses her practice on white collar criminal defense, government and internal investigations, and anti-money laundering (AML) and international corruption matters.

Kyle was one of 19 prosecutors selected by Robert S. Mueller III to conduct the high-profile investigation into alleged Russian election interference, coordination between Russian officials and the Trump campaign, and related matters. As Assistant Special Counsel, Kyle played a lead role in federal tax and bank fraud investigations, as well as a money laundering investigation into the funding of Russian intelligence cyber intrusions during the 2016 Presidential election using cryptocurrency.

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Marina Olman Pal, Greenberg Trauig Law Firm, Miami, Corporate and Finance Law Attorney
Practice Group Attorney

Marina Olman-Pal advises foreign and U.S. financial institutions on licensing, regulatory and compliance matters. She represents clients before U.S. regulators such as the Federal Reserve, OCC, FDIC, FinCEN, OFAC, Florida Office of Financial Regulation and other supervisory authorities. Marina counsels foreign and U.S. financial institutions on a broad range of issues including the Bank Secrecy Act (BSA), anti-money laundering compliance and Office of Foreign Assets Control (OFAC) sanction programs.

Concentrations

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305-579-0779
Emily M. Wassermann Corporate Attorney Greenberg Traurig Miami, FL
Associate

Emily M. Wassermann is a member of the Corporate Practice in Greenberg Traurig's Miami office.

Capabilities

  • Corporate 
  • Latin America Practice
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