On December 18, 2024, FinCEN issued an alert to raise awareness of fraud schemes abusing FinCEN’s name, insignia, and authorities for financial gain. These FinCEN-specific fraud schemes include scams that exploit beneficial ownership information reporting; misuse FinCEN’s Money Services Business Registration tool; or involve the impersonation of, or misrepresent affiliation with, FinCEN and its employees.
The alert provides guidance to the public on how to identify and avoid these scams and provides typologies and red flag indicators to help financial institutions detect, prevent, and report potential suspicious activity to FinCEN.
Fraud typologies include:
Use of fraudulent BOI forms and websites;
Fraudulently registering as MSBs with FinCEN; and
Impersonation of FinCEN and its employees.
FinCEN has identified the following red flag indicators to help detect, prevent, and report potential suspicious activity related to scammers abusing FinCEN’s name, insignia, and authorities to perpetrate fraud:
Red Flag Indicators for BOI Reporting Scams
A customer intending to file their BOI directly with FinCEN makes an online payment;
A customer makes an online payment to file their BOI with a third-party filing company or service provider through a website domain that is registered in a foreign location;
A customer sends a payment to file their BOI through a third-party filing company or service provider with little to no online presence or a name similar to legitimate companies or government entities; and
A customer uncharacteristically sends a payment to a counterparty and tells the financial institution that the funds must be sent immediately to FinCEN or risk a fine, penalty, or legal action for failure to file their BOI.
Red Flag Indicators for Fraudulent Schemes Involving MSBs
A company announces its “license” or “approval” from FinCEN as an MSB via a press release through a news wire service, on its website, or social media;
A company has been flagged by a state financial regulator as potentially fraudulent or for having exploited victims in the past;
A company is registered as an MSB with FinCEN but is not licensed as an MSB with any U.S. state or territorial financial regulatory authority where they claim to operate;
A company with a limited online presence prominently highlights their MSB registration with FinCEN or claims to be licensed by FinCEN alongside unverified testimonials and promotions of risk-free high-investment returns, often on its website, a news wire service, or a social media post;
An MSB registered with FinCEN shares a street address with other recently registered MSBs;
VASPs or other financial institutions provide a user with a virtual currency deposit address that has been flagged as potentially fraudulent by blockchain explorers or blockchain analytic tools;
An MSB claims that its AML Program or “know your customer” policies, procedures, or internal controls have been formally approved or otherwise vetted by FinCEN;
An individual or entity claims that their MSB registration with FinCEN is either a “recommendation,” “certification of legitimacy,” “approval,” or “endorsement” by FinCEN, Treasury, or the U.S. government, or any U.S. government official;
An individual or entity claims that their MSB registration with FinCEN equates to U.S. government approval to operate in the United States;
An MSB suggests that users need to pay an AML-related processing “fee” or a “FinCEN fee” to use its services, including to deposit or withdraw funds from its platform;
A company is registered as an MSB with the same or very similar name of a large, well-known financial institution that appears to lack an MSB registration requirement, such as a bank, credit union, or broker-dealer, and appears to have no official affiliation with that large, well-known financial institution.
Red Flag Indicators for FinCEN Imposter Schemes
A customer sends a payment purportedly to FinCEN or in connection with an apparent penalty owed to FinCEN, with the memo line denoting “tax,” “fee,” “debt,” “prize,” “lien,” or “grant.”
A customer uncharacteristically sends payments to a new counterparty and indicates to the financial institution that the funds must be sent immediately to pay FinCEN for a supposed “AML/CFT violation,” “outstanding debt,” or a “Treasury grant.”
A customer indicates that they received a phone call, text message, email, or U.S. Mail from FinCEN demanding immediate payment.
A customer presents a letter supposedly from the FinCEN Director, Deputy Director, or any other FinCEN or Treasury official requesting immediate payment.
Read FinCEN’s press release here.
The full Alert can be found here.