FinCEN Mail Theft Check Fraud Alert
FinCEN and the Postal Inspection Service mapped how checks are stolen from the mail and spent. Here is what the alert says, and what it asks of banks.
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What the alert is and who issued it
FinCEN's alert says it was issued in close collaboration with the United States Postal Inspection Service.
FinCEN's alert says its information comes from FinCEN's analysis of BSA data, open-source reporting, and information from law enforcement partners. FinCEN's alert says fraud is one of the anti-money laundering and countering the financing of terrorism National Priorities.
The alert is one of a set of FinCEN advisories.
How checks are stolen from the mail
FinCEN's alert says criminals stealing checks from the mail generally target personal checks, business checks, tax refund checks, and government assistance checks. FinCEN's alert says business checks may be more valuable to thieves because business accounts are often well-funded and fraud may take longer to notice.
FinCEN's alert says criminals target USPS blue collection boxes, unsecured residential mailboxes, and privately owned cluster box units. FinCEN's alert says mail theft can occur through forced entry or the use of makeshift fishing devices.
USPS Arrow Keys
FinCEN's alert says mail theft increasingly involves the use of authentic or counterfeit USPS master keys, known as Arrow Keys. FinCEN's alert says Arrow Keys open USPS blue collection boxes and cluster box units within a geographic area.
The keys are worth stealing. FinCEN's alert says recent cases involve organized criminals violently targeting USPS mail carriers with the intent of stealing Arrow Keys.
The theft is not always outside the Postal Service. FinCEN's alert says there have been cases of corrupt Postal Service employees who unlawfully provide Arrow Keys to criminal actors to facilitate mail theft. FinCEN's alert says there have been cases of Postal Service employees stealing checks at USPS sorting and distribution facilities.
FinCEN's alert says USPIS reports mail theft-related check fraud is increasingly committed by non-USPS employees, from individual fraudsters to organized criminal groups.
What happens to a check after it is stolen
FinCEN's alert says organized criminal groups behind mail theft check fraud include scheme organizers, recruiters, check washers, and money mules.
The check itself is altered. FinCEN's alert says that during check washing, illicit actors also often increase the dollar amount on the check. FinCEN's alert says stolen victim checks are also counterfeited using routing and account information from the original check. FinCEN's alert says fraudsters may copy and print multiple washed checks for future use or to sell to third-party criminals.
Then the check moves into the banking system. FinCEN's alert says illicit actors may cash or deposit stolen checks in person, through ATMs, or by remote deposit. FinCEN's alert says criminals may rely on money mules and their pre-existing accounts to deposit fraudulent checks.
The check is not always the end of it. FinCEN's alert says criminals may use personal identifiable information from stolen mail for future fraud schemes like credit card fraud.
The red flags FinCEN identified with the USPIS
FinCEN's alert says it worked with USPIS to name red flags. These help banks spot and report mail theft-related check fraud.
FinCEN's alert lists a red flag of non-characteristic large withdrawals on a customer's account via check to a new payee. FinCEN's alert lists a red flag of a customer complaining that a check they mailed was never received by the intended recipient.
FinCEN's alert lists a red flag of non-characteristic, sudden, abnormal check deposits, often electronic, followed by rapid withdrawal or transfer of funds.
FinCEN's alert says examination of suspect checks may reveal faded handwriting underneath darker handwriting, as if the original writing was overwritten. FinCEN's alert says suspect accounts may show indicators of other suspicious activity, such as pandemic-related fraud.
FinCEN's alert lists a red flag of a non-customer trying to cash a large check in person and giving a suspicious explanation when questioned.
What financial institutions are asked to do
The alert asks banks to work within their BSA programs. FinCEN's alert says financial institutions are encouraged to perform additional due diligence where appropriate under their risk-based approach to BSA compliance.
The alert lists red flags. These red flags help financial institutions spot suspicious activity. Then they can report it.
FinCEN's alert says information sharing among financial institutions is critical to identifying, reporting, and preventing mail theft-related check fraud.
The alert also asks banks to help the victim. FinCEN's alert says financial institutions should refer customers who may be victims of mail theft check fraud to the USPIS to report the incident. FinCEN's alert recommends financial institutions refer customers to USPIS tips on how to protect against mail theft.
Where the alert fits in the BSA reporting framework
The alert fits into the reporting system. Banks already run this system. An institution may detect suspicious activity tied to this fraud. It reports that activity.
The USPIS handles the criminal side. FinCEN's alert says the USPIS is the law enforcement, crime prevention, and security arm of the USPS. FinCEN's alert says Postal Inspectors are federal law enforcement agents with broad authority to investigate mail theft and associated financial crimes. FinCEN's alert says USPIS is one of several federal agencies with authority to investigate the laundering of illicit proceeds.
The bank detects the fraud in its accounts and reports it through the BSA. The Postal Inspection Service looks into the theft and the laundering that follows.