FinCEN Releases Notice on COVID-19 Vaccine-Related Scams

The Financial Crimes Enforcement Network released FinCEN Notice FIN-2020-NTC4 to alert financial institutions to the potential for fraud, ransomware attacks, or similar types of criminal activity related to COVID-19 vaccines and their distribution.

COVID-19 vaccine fraud may include the sale of unapproved and illegally marketed vaccines, the sale of counterfeit versions of approved vaccines, and illegal diversion of legitimate vaccines.  Already, fraudsters have offered, for a fee, to provide potential victims with the vaccine sooner than permitted under the applicable vaccine distribution plan.

In addition, cybercriminals, including ransomware operators, will continue to exploit the COVID-19 pandemic alongside legitimate efforts to develop, distribute, and administer vaccines. FinCEN is aware of ransomware directly targeting vaccine research, and Financial institutions and their customers should also be alert to phishing schemes luring victims with fraudulent information about COVID-19 vaccines.

SAR reporting, in conjunction with effective implementation of Bank Secrecy Act compliance requirements by financial institutions, is crucial to identifying and stopping fraud, cybercrime, and cyber-enabled crime, including those related to the COVID-19 vaccine. Financial institutions should provide all pertinent information in the SAR.

  • FinCEN requests that financial institutions reference “FIN-2020-NTC4” in SAR field 2 (Filing Institution Note to FinCEN) and the narrative portion of the SAR to indicate a connection between the suspicious activity being reported and the activities highlighted in this notice.
  • Financial institutions should also 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 (e.g., vaccine scam or vaccine ransomware) in SAR field 34(z).
  • FinCEN requests that filers further detail the reported activity in the narrative portion of the SAR. If the activity is suspected of being a scam, filers should provide known details about how the scammers contacted the victim, how the victim provided or attempted to provide payment related to the scam, and any other available details including data related to the financial transactions or method of contact, such as Internet Protocol (IP) addresses and phone numbers. For guidance on ransomware attacks, see FinCEN Advisory, FIN-2020-A006, “Advisory on Ransomware and the Use of the Financial System to Facilitate Ransom Payments,” (October 1, 2020).

Credit unions can refer to FinCEN’s May 2020 Notice Related to the Coronavirus Disease 2019 (COVID-19), which contains information regarding reporting COVID-19-related crime, and reminds financial institutions of certain BSA obligations.

Question of the Week

Q. If we have a business that is opening an account that is exempt from paying taxes, do we still have to require that they certify their TIN on the W-9 form?

A. Yes. The W-9 (or W-8BEN) should be filled out regardless of the tax status of the business/individual.

The W-9 requires the individual or business to certify that the tax identification number provided is correct and allows the business to claim an exemption if necessary.

Related Links

W-9 Instructions

Legal Briefs

National Credit Union Administration

Request for Information on Communication Methods Approved by Board
The NCUA Board unanimously approved, by notation vote, a request for information seeking comments and information on the NCUA’s communication methods to promote efficiency and increase transparency.

Operating Fee Schedule Adjusted for 2021
The NCUA released Letter to Federal Credit Unions 21-FCU-02, which provides information on changes to its regulations and associated methodologies for computing the annual operating fee charged to federal credit unions.

Community Charter Conversions and Expansions
The NCUA issued Letter to Federal Credit Unions 21-FCU-01, which provides updated guidance and templates to assist federal credit unions seeking to convert to a community field of membership or expand their existing community field of membership.

Summary of the Consolidated Appropriations Act, 2021
The NCUA issued Letter to Credit Unions 21-CU-01, which provides information about the provisions of the Consolidated Appropriations Act, 2021 that directly affect credit unions and their members.

Underserved Area Expansions
The NCUA issued Letter to Federal Credit Unions 21-FCU-03, which provides information that federal credit unions with a multiple common bond field of membership may include in their fields of membership, without regard to location, underserved communities.

U.S. Treasury

SBA and Treasury Announce PPP Re-Opening; Issue New Guidance
The SBA and Treasury announced the re-opening of the SBA portal to receive PPP loan applications.  CDFIs will have access for several days before other lenders can submit their applications.  New First Draw and existing PPP borrowers wishing for increases can start submitting on Monday, Jan. 11.  Second Draw PPP Loans can be submitted starting on Wednesday, Jan. 13.

Office of Foreign Assets Control

OFAC has updated the SDN list as of Jan. 11. The last update prior to this was Jan. 5.

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.

Posted in Compliance, Compliance News.