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07/31/2020

FinCEN Advisory on cybercrime during pandemic

Advisory FIN-2020-A005 has been issued by FinCEN to alert financial institutions to potential indicators of cybercrime and cyber-enabled crime observed during the COVID-19 pandemic. Many illicit actors are engaged in fraudulent schemes that exploit vulnerabilities created by the pandemic.

The advisory contains descriptions of COVID-19-related malicious cyber activity and scams, associated financial red flag indicators, and information on reporting suspicious activity. FinCEN will continue issuing COVID-19-related information to financial institutions to help enhance their efforts to detect, prevent, and report suspected illicit activity on its website www.fincen.gov/coronavirus.

07/30/2020

Treasury and State target Assad regime supporters

The Treasury Department announced Wednesday that OFAC and the State Department have sanctioned four individuals and ten entities for enriching the regime of Syrian President Bashar al-Assad or obstructing or preventing a ceasefire in the Syrian conflict. For identity information on those sanctioned, see BankersOnline's OFAC Update.

07/29/2020

Key ISIS financial facilitators in Middle East designated

On Tuesday, OFAC designated two Islamic State of Iraq and Syria (ISIS) financial facilitators located respectively in Syria and Turkey for providing financial support to ISIS.

These individuals have been designated in accordance with Executive Order (E.O.) 13224, which, among other things, targets those who commit acts of terrorism and those who have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of such acts and of persons previously designated under the E.O.

For identity information on these individuals, see BankersOnline's OFAC Update.

As a result of Tuesday’s action, all property and interests in property of the designated individuals that are in or come within the United States or the possession or control of U.S. persons must be blocked and reported to OFAC. OFAC’s regulations generally prohibit all dealings by U.S. persons or within the United States (including transactions transiting the United States) that involve any property or interests in property of blocked persons. In addition, persons that engage in certain transactions with the individuals designated Tuesday may themselves be exposed to sanctions or subject to an enforcement action.

07/27/2020

FDIC relaxes Section 19 application restrictions

FDIC FIL-72-2020, issued Friday, announced the FDIC's approval of a final rule to revise and incorporate into the agency’s regulations a longstanding Statement of Policy (SOP) related to individuals with certain criminal offenses on their records who seek employment in the banking industry. Section 19 of the Federal Deposit Insurance Act prohibits a person from participating in the affairs of an FDIC-insured institution if he or she has been convicted of a crime involving dishonesty, breach of trust, or money laundering, or has entered into a pretrial diversion or similar program in connection with a prosecution for such an offense, without the prior written consent of the FDIC. Revising and codifying the SOP into the regulations will provide better transparency and clarity regarding the interpretation of Section 19 and the application process.

The rule now excludes all covered offenses that have been expunged or sealed by a court of competent jurisdiction or by operation of law from being considered an offense of record under Section 19. It also expands the de minimis offenses (minor offenses for which FDIC approval is automatic and no application is required). The FDIC expects the changes will reduce the number of applications required and reduce regulatory burden on banks and individuals. The rule will become effective 30 days after Federal Register publication.

PUBLICATION UPDATE: To be published on 8/20/2020, with an effective date of 9/21/2020.

07/24/2020

OFAC sanctions two more Maduro supporters

OFAC has designated brothers Santiago Jose Moron Hernandez and Ricardo Jose Moron Hernandez for providing support for Nicolas Ernesto Maduro Guerra and the corrupt activities of members of the illegitimate regime of his father, Nicolas Maduro Moros.

As a result of OFAC's action, all property and interests in property of these individuals that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by the designated individuals, are also blocked. OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons.

For further identification information on the designated individuals, see BankersOnline's OFAC Update.

07/23/2020

OCC OKs federal bank cryptocurrency custody services

The Office of the Comptroller of the Currency has published an Interpretive Letter to clarify national banks' and federal savings associations' authority to provide cryptocurrency custody services for customers. The OCC concludes that providing cryptocurrency custody services, including holding unique cryptographic keys associated with cryptocurrency, is a modern form of traditional bank activities related to custody services, and that crypto custody services may extend beyond passively holding "keys."

In a press release, the OCC said that the letter "applies to national banks and federal savings associations of all sizes and is consistent with a number of states which have already authorized state banks or trust companies to provide similar functions."

07/21/2020

Executive Order 'normalizing' treatment of Hong Kong

Treasury has posted a notice concerning Executive Order 13936, "The President's Executive Order on Hong Kong Normalization." The order — issued on July 14 following China's imposition of national security legislation on Hong Kong, effectively eliminating its former autonomous status — states that U.S. policy will be to suspend or eliminate different and preferential treatment for Hong Kong to the extent permitted by law.

07/20/2020

OFAC targets Chinese drug traffickers and Ortega inner circle

On Friday, Treasury reported that OFAC had designated four individuals and one entity under the Fopreiogn Narcotics Kingpin Designation Act for providing support to the Zheng Drug Trafficking Organization.

Treasury also announced that OFAC had designated Juan Carlos Ortega Murillo, son of Nicaraguan President Daniel Ortega; Jose Jorge Mojica Mejia; and two companies they use in an effort to distribute regime propaganda and launder money.

For identity information on the individuals and entities designated, see BankersOnline's OFAC Update, which also includes a list of removals and an update made by OFAC on Friday.

07/17/2020

Florida-based credit card interest reduction scam halted

The Federal Trade Commission has reported a federal court in Florida has temporarily halted an alleged sham credit card interest rate reduction operation that often targeted financially distressed consumers and older adults.

The court’s order temporarily halts the Orlando-based operation, freezes its assets, and appoints a receiver over the businesses. In a joint complaint, the FTC and Florida Attorney General’s Office are seeking to permanently stop the conduct and secure money for consumer refunds. According to the complaint, the defendants blasted consumers with telemarketing cold calls promising to permanently and substantially reduce their credit card interest rates. After duping consumers into believing they were affiliated with the consumer’s existing credit card companies or well-known credit card networks such as Mastercard or Visa, the defendants allegedly promised to save them thousands of dollars in credit card interest and enable them to pay off their credit card debt three to five times faster. The agencies allege the defendants charged upfront fees of as much as $3,995 for their bogus services.

07/17/2020

FinCEN alert on Twitter virtual currency scam

FinCEN has issued an Alert [FIN-2020-Alert001] emphasizing a high-profile scam exploiting Twitter accounts to solicit fraudulent payments denominated in convertible virtual currency (CVC). Cyber threat actors compromised the accounts of public figures, organizations, and financial institutions to solicit payments to CVC accounts, claiming that any CVC sent to a wallet address would be doubled and returned to the sender. Persons who receive one of these solicitations should not send money or provide any personal or confidential information to these individuals without independent verification of authenticity.

The Alert says it is critical that CVC exchanges and other financial institutions identify and report suspicious transactions associated with this type of activity as quickly as possible. For example, a CVC or other financial account may receive a high volume of payments in a short period of time from previously unaffiliated accounts and/or multiple originating CVC addresses.

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