AMLD-CMG | VOLUME 1 | ISSUE NO.

1 | 08 MAY 2020

Financial Crimes to
Watch Out for during a
Global Pandemic
‘Cause banks, too, can get infected

NEW NORMAL, NEW CHALLENGES

Donation/Charity Scams
Fundraising for fake charities or fraudulent donation drives that seek to take
advantage of the goodwill of the general public to help the needy

Business Email Compromise (BEC) Fraud

Fraudsters impersonate persons holding positions with certain level of authority,
usually corporate executives (e.g. “CEO Fraud”), through which they would
request for processing of seemingly legitimate transaction instructions for a
financial institution to execute, usually with a sense of urgency. The rendered
instructions may include:

• Disclosure of confidential information (phishing);

• Diversion of payments under the premise that usual procedures (i.e.
countersignatures) cannot be followed due to restrictions;
• Directing that payments be made to an unauthorized account, instead
of the company's main account

Investment /Product/Supply Scams

Capitalising on the anxieties and fears of victims during this period, and on the
increased demand for sanitation products, fraudsters may:

• introduce “wonder drug” with promises of immunity and/or cure;

• offer investment opportunities to secure financial standing in the
economic turmoil caused by the crisis;
• pose as vendors of counterfeit sanitary and pharmaceutical products,
PPEs, etc. usually with abnormally low or high prices, and involve false
documents and fictitious websites
 Money Mules
These are persons recruited to lend their personal bank/e-money accounts to
receive cash deposits/online transfers from illegal sources under the guise of
“charity or donations”.

Some money mules are also unaware that they are being used as such. For
example, fraudsters display job postings requesting individuals to receive funds
in a client’s personal account, and then facilitate transfer onwards via wire,
through MSBs like Western Union or MoneyGram.

There are also messages or phone calls from individuals unknown to the victim
who claim to be abroad and need assistance via financial support.

Online Human Trafficking and Exploitation

Fund transfers or digital payments, typically from foreign sources, for online sex
trafficking or child exploitation especially during the community quarantine as
impoverished communities seek sources of revenue.

Veiled Donations for Terrorism and Terrorism Financing

Online donations solicited and collected
dw by certain organizations or persons
purportedly for pandemic purposes but in fact will be used to finance terrorism

The common RED FLAGS:

 heightened account activity compared to historical transactions;
 transaction amounts incommensurate with the profile of the client;
 activities that deviate from the intended purpose of the account;
 sudden funds transfers with a new beneficiary/remitter, with an account opened in a
country in which client does not operate, or in a jurisdiction that has no apparent
connection with the transaction to be carried out

Be one with us in putting a stop to illicit activities – to protect

the Bank, and the country.

Email us at amld@dbp.ph for concerns relative to any of the

identified suspicious transactions.

SOURCES
 BSP Memorandum No. M-2020-036
 The Egmont Group of Financial Intelligence Units Public Bulletin: Business E-mail Compromise
Fraud


ABCOMP’s report on Financial Crime Risk Implications of COVID-19 (April 2020)
JP Morgan’s report on Financial Crime Risk Management in Correspondent Banking (May 2020)
IN THE KNOW
 EUROPOL’s report on Pandemic Profiteering: How Criminals Exploit the COVID-19 Crisis
 www.justice.public.lu The Chronicles of AMLA