Law360

During the COVID-19 pandemic, many financial institutions are already stretched thin navigating the small business loan programs under the Coronavirus Aid, Relief and Economic Security, or CARES, Act and responding to pandemic planning guidance issued by the Federal Financial Institutions Examination Council. Now the government also expects financial institutions to be the "first line of defense" in combating fraud schemes connected to the COVID-19 pandemic.1

Authors: Jennifer L. Achilles Alejo R. Cabranes

On May 18, the Financial Crimes Enforcement Network issued its first COVID-19-related advisory to alert financial institutions to the types of medical fraud emerging during the pandemic.2 The advisory is intended to help the financial industry identify red flags accompanying the most common types of fraudulent conduct currently occurring in the medical field.

The advisory is the first of many that FinCEN will be issuing in the coming weeks. Financial institutions will be expected to study these advisories, and to modify and/or tighten their compliance practices and procedures accordingly to be sure they are meeting their obligations under the Bank Secrecy Act.

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  1. Prepared Remarks of FinCEN Director Kenneth Blanco, NYU Law Program on Corporate Compliance and Enforcement (June 12, 2019) (urging audience members to consider "how compliance – by financial institutions in particular – plays a critical role in preventing these bad things from happening. In many instances, they are the first line of defense").
  2. FinCEN Advisory FIN-2020-A002 , "Medical Scams Related to the Coronavirus Disease 2019 (COVID-19)," (May 18, 2020).