Overseers of depository accounts noticed a lot moreshady-looking funnel account activity in 2014, according toFinCEN's latest annual review of Suspicious Activity Reportfilings.

|

The report, which examined more than three million SARs filed bycredit unions, banks, insurance companies, casinos, money servicesbusinesses and several other types of entities between March 1,2012, and Dec. 31, 2014, called the accounts “the standout trendfor 2014” among depository institutions and noted almost 10,000mentions of the activity in one category compared to just 123mentions in 2012 and 2013.

|

“Because of the clear and sustained rise in funnel accountactivity mentions from June 2014 on, we attribute this increase tofiler response to FinCEN Advisory FIN-2014-A00514 published on 28May of the same year,” FinCEN noted.

|

Funnel accounts are frequently associated with criminal activityand involve opening an account at a bank or credit union that canreceive cash deposits at branches in multiple states, according toFinCEN. People acting on behalf of the criminal organization –sometimes unwittingly – then deposit cash proceeds from criminalactivity into the account at different branches, and the depositsare kept below $10,000 to avoid identification and record-keepingrequirements. An intermediary then uses the money to buy goods thatare shipped to other countries for sale. The proceeds from thesales then go back to the criminal ring.

|

To file a SAR, most institutions use a form that includes 10activity categories, 80 check boxes and a 50-character text box todescribe the activity. During 2014, depository institutions used53,872 unique combinations of words to call out suspicious activitythey felt could not be adequately categorized on the FinCENform.

|

By a wide margin, Social Security number fraud was the mostprevalent in the text comments, appearing in 51,700 SARs. Incomefraud, tax fraud, ID fraud/theft, origination fraud, scams orschemes and cyber-related keywords were the next most popular,appearing in between 24,000 and 7,300 SARs from depositoryinstitutions last year.

|

References to identity theft claims were up 1,800% compared tothe 2012 to 2013 reporting period; false statements rose by 122%,and circumventing Chinese currency regulations also rose by 112% in2014, according to the report.

|

References to suspicion about the use of funds, incomediscrepancy, identity fraud and employment discrepancy also morethan doubled at depository institutions in 2014 compared to 2012 to2013, the report added.

|

There was one good piece of news from depository institutions:Some types of fraud were notably less reported in 2014, includingexcessive cash payments (down by 63% and 39% in two categories),origination fraud (down by 60%) and prepaid card fraud (down by32%), according to the report.

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.