Page 42 - ACAMS-Today-V20N3

[ PRACTICAL SOLUTIONS ]
By leveraging crime theory, police officers can move from tactical reactive measures when fighting financial crime to proactive strategies that become more predictive
In early 2020, as the pandemic started to ripple across every continent, it became clear that criminal actors would leverage every aspect of the virus to further their criminal enterprises. In the U.S., large-scale fraud had started to occur with respect to the federal government’s CARES Act relief and the associated programs that were designed to assist American workers displaced by the pandemic.3 Immediate action was taken by numerous federal agencies like the FBI in tandem with local law enforcement. In March 2021, the U.S. Justice Department reported that they had “publicly charged 474 defendants with criminal offenses in connection with COVID-19-related schemes across 56 federal districts to recover more than $569 million in U.S. government funds.”4 Similar fraudulent scams were reported in both Canada and Europe.5,6 As the pandemic rolled across the planet, so too did fraud.
Applying crime theory
Public-private partnerships are not new to crime suppression and detection and they are used around the world. Some are targeted to address specific crimes such as human trafficking and illegal wildlife trafficking.7 What makes these and other partnerships unique is the inclusion of financial institutions (FIs) and other nongovernment agencies well-positioned to enhance the effort. In addition to these partnerships, law enforcement needs to utilize frameworks in which to optimize their own efforts and resources and that of their partners. By leveraging crime theory, police officers can move from tactical reactive measures when fighting financial crime to proactive strategies that become more predictive. One such theory that would assist is the routine activity theory. This approach to crime reduction was espoused by Professors Marcus Felson and Lawrence Cohen in 1979 as a more specific theory based on situational crime prevention.8 The theory states that in order for a crime to occur successfully there has to be a suitable victim, a motivated offender and the absence of a capable guardian. Overlaying this theory on the scourge of COVID-19 fraud, one can see the tremendous disadvantages law enforcement has and the difficulty in disrupting this durable crime.
From the perspective of “resource-challenged” law enforcement agencies, the potential benefit of these partnerships is compounded when observing COVID-19 fraud through the lens of
this theory. The one aspect of COVID-19 fraud that cannot be altered significantly is that of motivated offenders. There will always be an abundance of those that seek to defraud communities. But as we deal with the impacts of the pandemic, specifically on fraud rates, we need to start leveraging specific and unique partnerships that can assist and enhance efforts to buttress suitable guardians and remove or target harden potential victims. It must be stressed that some of these victims are the governments seeking to provide economic relief from the pandemic.
Fighting the new form of fraud
As stated earlier, crime that came as a result of COVID-19, and particularly fraud, is unique in that this pandemic has altered societal organization in so many ways. Almost overnight billions of people moved from a “traditional” form of banking to digital platforms because of lockdowns and travel restrictions. In addition, and because of this seismographic shift, cyber intrusions and identity theft became common grist for fraudsters.9
When dealing with such an overwhelming challenge as COVID-19 and all the associated complications, partnerships can better arm law enforcement teams, government social safety programs, other government agencies and people tasked with protecting the community. In addition, by joining in aligned messaging and communication, these partnerships have the capability of exponen- tially amplifying a unified strategy to the masses utilizing traditional and social media channels. In short, this is targeted crime prevention using many channels.
From a strategic standpoint, partnerships will be essential in operationalizing approaches to detecting COVID-19 fraud after it has occurred. U.S. agencies and regulators have led the way with a plethora of advisories for both law enforcement and FIs. The U.S. Financial Crimes Enforcement Network has published 12 advisories to date that guide FIs in detail as to how to detect ongoing COVID-19 fraud within their transactional and account data.10 Other national financial intelligence units (FIUs) have published similar advisories for law enforcement and reporting entities.
42 [ JUNE-AUGUST 2021 ]