FinCEN provides financial institutions ‘red flags’ of potential frauds using FinCEN’s name

An alert about fraud schemes abusing the name, insignia, and authorities of Treasury’s financial crimes enforcement unit for financial gain was issued this week to warn corporations, money services businesses and financial institutions and urge that suspected incidents be reported.

The Financial Crimes Enforcement Network (FinCEN) said these FinCEN-specific fraud schemes include scams that exploit beneficial ownership information (BOI) reporting, misuse FinCEN’s money services business (MSB) registration tool, or involve the impersonation of – or misrepresent affiliation with – FinCEN and its employees.

“FinCEN reminds financial institutions to be vigilant in identifying such schemes, which seek to solicit money or personal information from the public, and to report suspicious activity related to these schemes to FinCEN,” the alert states. “FinCEN further encourages financial institutions6 to urge their customers to be equally vigilant in identifying and avoiding these and similar government imposter scams.”

Methodologies noted include the use of fraudulent BOI forms and websites; scammers fraudulently registering as MSBs with FinCEN; and impersonation of FinCEN and its employees.

The alert lists 19 “red flags” that can help financial institutions detect, prevent, and report suspicious activity.

“Because no single red flag is determinative of illicit or other suspicious activity, financial institutions should consider the surrounding facts and circumstances,” the alert notes. “This may include, but is not limited to, a customer’s historical financial activity, whether the transactions are in line with prevailing business practices, and whether the customer exhibits multiple red flags before determining if a behavior or transaction is suspicious or otherwise indicative of these schemes.”

FinCEN Alert on Fraud Schemes Abusing FinCEN’s Name, Insignia, and Authorities for Financial Gain (FIN-2024-Alert005)