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HSI, ACAMS issue guidance on combating financial fraud, other crypto scams

Fraud, Bribery & CorruptionHSI, ACAMS issue guidance on combating financial fraud, other crypto scams

WASHINGTON – Homeland Security Investigations (HSI) in partnership with ACAMS issued an alert today outlining anti-money laundering red flags and compliance guidance associated with so-called “pig-butchering,” a rising global fraud scheme that targets victims by earning their confidence over the course of weeks or months before soliciting money for fraudulent crypto-asset investments. The alert was issued as part of the CORNERSTONE outreach project.

“Pig-butchering and other sophisticated crypto-scams have successfully defrauded victims out of hundreds of millions of dollars by earning their trust via social-media platforms, messaging apps, dating websites and other forms of digital communication – in fact, victim loss was estimated at $3.3 billion in 2022,” said Matthew Millhollin, acting Assistant Director for HSI’s Countering Transnational Organized Crime (CTOC) division. “Partnerships with crypto firms and other financial institutions are critical in identifying and preventing financial crimes and other similar emerging cyber fraud.”

Perpetrators of pig-butchering scams have often been trafficked by organized crime groups and forced to work at scam centers in Asia under threat of violence, while targeting individuals in other regions of the world. To help financial institutions better identify and report activity linked to fraudulent schemes, the alert outlines transactional and behavioral red flags, geographic risk considerations, recommended customer due diligence practices, and other guidance for AML compliance professionals.

“For decades, the CORNERSTONE initiative has helped protect American businesses and vulnerable individuals, and this alert is no different,” said Joby Carpenter, ACAMS Global Subject-Matter Expert in Cryptoassets, Illicit Finance, and Emerging Threats. “By outlining AML compliance practices for CORNERSTONE subscribers and our members across the world, this initiative is another example of the power that the public and private sectors can wield when they work together.”

CORNERSTONE is a public-private partnership initiative launched in 2003 to identify and close systemic vulnerabilities within the private sector that could be used by criminals to generate, move, and store illicit assets.

The initiative marks the second time HSI and ACAMS have collaborated in a public-private partnership to fight emerging financial crimes. In 2022, the organizations jointly issued the report Detecting and Reporting the Illicit Financial Flows Tied to Organized Theft Groups (OTG) and Organized Retail Crime (ORC) to support law enforcement investigators and compliance professionals.

CTOC’s Financial and Fraud Division leads programmatic oversight of HSI’s strategic planning, national policy implementation, and development and execution of operational initiatives for various programmatic areas targeting transnational criminal organizations involved in money laundering, financial fraud, bulk cash smuggling, document fraud, benefit fraud, labor exploitation, and related crimes enforced by HSI, as well as investigative resources related to asset forfeiture, seized property, and equitable sharing.

In fiscal year 2022, HSI set a new record for seized currency and assets of more than $5 billion, dealing a significant blow to transnational criminal organization operations and criminals seeking to profit from illicit crimes. This increase of approximately $4 billion from the previous year was due largely to increased seizures of cryptocurrency utilized for criminal activity.

Read the full alert online and subscribe to the CORNERSTONE newsletter. Follow us on Twitter @HSI_HQ to learn more about HSI’s global missions and operations.

HSI is a directorate of U.S. Immigration and Customs Enforcement (ICE) and the principal investigative arm of the U.S. Department of Homeland Security (DHS), responsible for investigating transnational crime and threats, specifically those criminal organizations that exploit the global infrastructure through which international trade, travel, and finance move. HSI’s workforce of over 8,700 employees consists of more than 6,000 special agents assigned to 237 cities throughout the United States, and 93 overseas locations in 56 countries. HSI’s international presence represents DHS’s largest investigative law enforcement presence abroad and one of the largest international footprints in U.S. law enforcement. Learn more about HSI online.

About ACAMS®

ACAMS is a leading international membership organization dedicated to providing opportunities for anti-financial crime (AFC) education, best practices, and peer-to-peer networking to AFC professionals globally. With over 100,000 members across 180 jurisdictions, ACAMS is committed to the mission of ending financial crime through the provision of anti-money laundering/counterterrorism-financing and sanctions knowledge-sharing, thought leadership, risk-mitigation services, ESG initiatives, and platforms for public-private dialogue. The association’s CAMS certification is the gold- standard qualification for AFC professionals, while its CGSS and CCAS certifications are for sanctions professionals and AFC practitioners working in the crypto space, respectively. ACAMS’ 60+ Chapters globally further amplify the association’s mission through training and networking initiatives. Visit acams.org for more information.

Story from www.ice.gov

Disclaimer: The views expressed in this article are independent views solely of the author(s) expressed in their private capacity.

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