This week we are doing something slightly different, and walking you through two different COVID-19 scams which our next Secret Crime Fighter discovered recently. While these are UK-specific, we have heard about similar abuses of Government schemes in the US and Europe. Hopefully you’ll find that these typologies are useful regardless of where you are in the world.
The UK Government introduced a Furlough Scheme earlier this year, which pays employers 80% of wages up to a cap of £2,500 per employee, for hours not worked by their employees. Whilst this helped to save jobs, and the speed at which it was introduced was admirable, the verifications used by the Government before sending out the payments were clearly lacking.
Our Secret Crime Fighter saw new accounts being opened, as well as previously dormant accounts being used, to receive Furlough payments into. Although the payments were supposed to be made to businesses, our Crime Fighter saw money being paid into retail accounts that were clearly not being used to operate a business, and sometimes belonging to people under the age of 18.
Once the money was in the accounts, it was either sent abroad, often to Albania or Romania, or withdrawn as cash.
There are a range of different grants available to businesses of all sizes, some being run by the Government, and others by local councils. Our Secret Crime Fighter has seen these being abused as well.
Customers, again often retail customers with no business footprint, have applied for and received local Council grants from multiple different councils, oftentimes nowhere near where they live. For example, one particular customer received £50k in grants from a London based borough, as well as from Glasgow and Manchester. The customer clearly had no operations in at least 2 of those places.
Where business customers were receiving grants, and our Crime Fighter suspected them to be fraudulent, their Standard Industrial Classification (SIC) Codes were to do with health, watches and jewellery, or hydroponics.
Again, when the grants were in the accounts, the money was withdrawn or sent abroad immediately.
Our Secret Crime Fighter deployed a series of controls aimed at deterring criminals, and detecting and stopping fraudulent funds from leaving the accounts.
They monitored for business customers using certain SIC codes, and flagged any Government payments into those accounts.
For certain Government schemes, they would only allow existing customers with refreshed Customer Due Diligence information to receive the payments.
They monitored for council grants coming from locations nowhere near the customer’s address.
And they introduced transaction monitoring rules focussed on rapid movement of funds where they were being sent abroad or withdrawn as cash.
Thanks for reading our latest Secret Crime Fighters newsletter. If you have an interesting typology that you’d like to share, we’d love to hear about it! Please email us at [email protected].
Compliance as a Competitive Advantage: A Perspective from the Frontlines of Embedded Finance.jpg)
Why Banks and Fintechs Need Good Compliance Programs: Understanding Consent Orders and Their Impact
Will AI + Automated Testing Eliminate the Third Line of Defense?This week we are doing something slightly different, and walking you through two different COVID-19 scams which our next Secret Crime Fighter discovered recently. While these are UK-specific, we have heard about similar abuses of Government schemes in the US and Europe. Hopefully you’ll find that these typologies are useful regardless of where you are in the world.
The UK Government introduced a Furlough Scheme earlier this year, which pays employers 80% of wages up to a cap of £2,500 per employee, for hours not worked by their employees. Whilst this helped to save jobs, and the speed at which it was introduced was admirable, the verifications used by the Government before sending out the payments were clearly lacking.
Our Secret Crime Fighter saw new accounts being opened, as well as previously dormant accounts being used, to receive Furlough payments into. Although the payments were supposed to be made to businesses, our Crime Fighter saw money being paid into retail accounts that were clearly not being used to operate a business, and sometimes belonging to people under the age of 18.
Once the money was in the accounts, it was either sent abroad, often to Albania or Romania, or withdrawn as cash.
There are a range of different grants available to businesses of all sizes, some being run by the Government, and others by local councils. Our Secret Crime Fighter has seen these being abused as well.
Customers, again often retail customers with no business footprint, have applied for and received local Council grants from multiple different councils, oftentimes nowhere near where they live. For example, one particular customer received £50k in grants from a London based borough, as well as from Glasgow and Manchester. The customer clearly had no operations in at least 2 of those places.
Where business customers were receiving grants, and our Crime Fighter suspected them to be fraudulent, their Standard Industrial Classification (SIC) Codes were to do with health, watches and jewellery, or hydroponics.
Again, when the grants were in the accounts, the money was withdrawn or sent abroad immediately.
Our Secret Crime Fighter deployed a series of controls aimed at deterring criminals, and detecting and stopping fraudulent funds from leaving the accounts.
They monitored for business customers using certain SIC codes, and flagged any Government payments into those accounts.
For certain Government schemes, they would only allow existing customers with refreshed Customer Due Diligence information to receive the payments.
They monitored for council grants coming from locations nowhere near the customer’s address.
And they introduced transaction monitoring rules focussed on rapid movement of funds where they were being sent abroad or withdrawn as cash.
Thanks for reading our latest Secret Crime Fighters newsletter. If you have an interesting typology that you’d like to share, we’d love to hear about it! Please email us at [email protected].
