The US Financial Crimes Enforcement Network (FinCEN) is warning companies and financial institutions of a sudden rise in medical scams related to the COVID-19 pandemic, in the first series of alerts regarding this issue.
The U.S. Treasury and FinCEN are acting on information from a few sources, including public reports, Bank Secrecy Act data, and law enforcement partners. Depending on the affected industry, the type of scam differs in scope and methods.
The biggest problem right now comes from scams that tout COVID-19-related cures, tests, vaccines, and associated services being offered to the public, which actually don’t exist.
“Examples of fraudulent medical services include claims related to purported vaccines or cures for COVID-19, claims related to products that purportedly disinfect homes or buildings, and the distribution of fraudulent or unauthorized at-home COVID-19 tests,” states the advisory. “Some of these scams may be perpetrated by illicit actors who recently formed unregistered or unlicensed medical supply companies.”
Another issue is directly related to disruptions in the demand and shipping of certain goods, with criminals looking to defraud consumers and companies by not delivering the ordered merchandise. Affected products include test kits, masks, drugs and other goods.
Finally, FinCEN and the Department of Justice (DOJ) have received numerous reports of people and companies either hoarding products or price gouging. Both of these practices are illegal under the Defense Production Act.
FinCEN is asking all financial institutions to use the details in the advisory and indicate a connection between the suspicious activity and other recent activities. Furthermore, they have to report any information regarding reporting COVID-19-related crimes and reminds financial institutions of certain BSA obligations.