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FinCEN Alert on Nationwide Surge in Mail Theft-Related Check Fraud Schemes Targeting the U.S. Mail

Posted by: Zaher Fallahi
Posted On: Mar 02, 2023

Source: FinCEN. Immediate Release

February 27, 2023

WASHINGTON—The Financial Crimes Enforcement Network (FinCEN) is issuing an alert to financial institutions on the nationwide surge in check fraud schemes targeting the U.S. Mail. Fraud, including check fraud, is the largest source of illicit proceeds in the United States and is one of the anti-money laundering/countering the financing of terrorism (AML/CFT) National Priorities. In coordination with the United States Postal Inspection Service (USPIS), FinCEN has identified red flags to help financial institutions detect, prevent, and report suspicious activity connected to mail theft-related check fraud.

“FinCEN is proud to partner with the United States Postal Inspection Service in producing this important and timely alert on mail theft-related check fraud designed to assist financial institutions in reversing this disturbing trend,” said Acting Director Himamauli Das. “Their vigilance and timely reporting will help law enforcement identify illicit actors who steal mail with the goal of defrauding innocent American taxpayers and businesses.”

Criminals have been increasingly targeting the U.S. Mail and United States Postal Service mail carriers since the COVID-19 pandemic to commit check fraud. Criminals typically steal personal checks, business checks, tax refund checks, and checks related to government assistance programs, such as Social Security payments and unemployment benefits ( Emphasis by Zaher Fallahi). Following the initial theft and fraudulent negotiation of the stolen checks, criminals may continue to exploit their victims by using the personal identifiable information found in the stolen mail for future fraud schemes, such as credit card fraud or credit account fraud.

Bank Secrecy Act reporting for check fraud has increased significantly in the last three years. In 2021, financial institutions filed over 350,000 Suspicious Activity Reports (SARs) to FinCEN to report potential check fraud, a 23 percent increase over the number of check fraud-related SARs filed in 2020. This upward trend continued into 2022, when the number of SARs related to check fraud reached over 680,000, nearly double from the previous year’s amount of filings.

In addition to filing a SAR, as applicable, when suspecting this type of fraud, financial institutions should refer their customers who may be victims of mail theft-related check fraud to the USPIS at 1-877-876-2455 or https://www.uspis.gov/report.

End of FinCEN Publication

Zaher Fallahi, Tax CPA, and Tax Controversy Defense Attorney, assists taxpayers nationwide with their tax preparation, cryptocurrency tax, foreign gifts, undisclosed foreign bank accounts, and other international tax matters. Tel.: (310) 719-1040, (714) 546-4272 and (877) 687-7558 toll free nationwide. Websites: zflegal.com and zfcpa.com E-mail taxattorney@zfcpa.com