In an effort to keep your credit union apprised of the latest security threats, Synergent wants to alert you about a new fraud scheme that could divert hundreds of millions of dollars intended for the unemployed into the hands of a well-organized Nigerian fraud ring. According to the U.S. Secret Service, this scheme is primarily impacting financial institutions in Washington, but it also is appearing in Massachusetts, Rhode Island, and North Carolina. Every state is likely vulnerable to this scheme and will be targeted if they have not been already.
Overview of the Scheme:
In the state of Washington, individuals residing out-of-state are receiving multiple ACH deposits from the State of Washington Unemployment Benefit Program, all in different individuals’ names with no connection to the account holder. This has included bogus unemployment claims in the names of credit union staff. A substantial amount of the fraudulent benefits submitted have used personally identifiable information (PII) from first responders, government personnel, and school employees. It is assumed the fraud ring behind this scheme holds a substantial PII database because of the volume of applications submitted thus far. According to the Secret Service, the scheme has targeted financial institutions of all sizes and is believed to involve hundreds if not thousands of money mules with potential losses of hundreds of millions of dollars.
The primary risk is to credit union employees who have been affected. Moreover, sources indicate there also is reputational risk to a financial institution if money mules used the institution as part of the scheme. There could be the potential for liability down the road as well.
What You Can Do:
Credit unions should make their employees aware of this scam and scrutinize new accounts set up by people from out of state. Monitor overseas wire transfers carefully and recognize any unusual member behavior.
If your credit union sees something suspicious, contact Tyler Martin with the U.S. Secret Service, at Tyler.Martin@usss.dhs.gov, and Dan Perry with the U.S. Attorney’s Office, at Dan.Perry@usdoj.gov. The Secret Service also has provided a template credit unions can use when reporting suspected fraudulent activity.
We will continue to keep credit unions informed as we learn additional information. In the meantime, please remain vigilant. The Secret Service reminds us that our mutual success depends on our mutual cooperation.