The Financial Crimes Enforcement Network posted an alert today on the nationwide surge in check fraud schemes targeting the U.S. Postal Service. Fraud, including check fraud, is the largest source of illicit proceeds in the United States and is an anti-money laundering/countering the financing of terrorism national priority, according to FinCEN. Working with the U.S. Postal Inspection Service, FinCEN identified red flags to help financial institutions detect, prevent and report suspicious activity connected to mail theft-related check fraud.
Criminals increasingly have targeted mail carriers since the COVID-19 pandemic to commit check fraud, in addition to blue collection boxes, unsecured residential mailboxes, and privately owned cluster box units at apartment complexes, planned neighborhoods and high-density commercial buildings. Personal checks, business checks, tax refund checks and checks related to government assistance programs and unemployment benefits are typically stolen. Following the initial theft and fraudulent negotiation of the stolen checks, criminals may continue to exploit victims by using the personal information found in the stolen mail for future schemes, such as credit card 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 on check fraud to FinCEN, a 23% increase compared to 2020. In 2022, SARs related to check fraud reached over 680,000. In addition to filing a SAR when suspecting fraud, FinCEN said banks should refer customers to the USPIS.