Financial fraudsters are taking advantage of the pandemic

The pandemic has put a lot of activities on hold – at least for the time being – but not when it comes to money laundering and other suspicious financial transactions, said Julie Leclerc, regional director for FINTRAC’s regional office in Montreal. 

Leclerc told a session of the Independent Financial Brokers of Canada (IFB) conference in mid-October that since COVID-19, FINTRAC has seen some “bizarre situations” recounted by some of its reporting entities. But at the same time, she said a number of outreach programs have taken place by Canada’s financial intelligence unit to ensure that reporting entities, which include securities dealers, banks and insurance companies, understand the importance of suspicious transactions. 

“I think money laundering is here [to stay]. It’s an everyday thing and it’s not going away,” said Leclerc. 

She said new schemes are being uncovered all the time, including those dealing with sexual exploitation, fentanyl, banking and casinos. Nevertheless, she said, FINTRAC is well positioned to fight money laundering and terrorist financing. “FINTRAC has been around for 20 years and reporting entities know the rules, regulations and risks.” 

According to a July 2020 bulletin from FINTRAC, since COVID-19 hit, counterfeiters around the world have focused on selling fake COVID-19 home test kits and pharmaceuticals, and giving false advice on treatment of COVID-19. Cyber criminals are taking advantage of the pandemic and the increased use of online services and targeting individuals, businesses and entities with scams, many of them directing victims to use bitcoin.

“General trends observed in money laundering and fraud—including the increasing use of virtual currencies, the leveraging of mules (often the victims themselves) and the use of product and services offered by financial institutions—will likely continue for the laundering of COVID-19 fraud proceeds.” 

Leclerc said FINTRAC has started training its people internally on bitcoin, foreseeing more attempts at money laundering with this new digital currency.