COVID-19 Related Scam Alert
July 9, 2020
In an effort to enhance awareness of potential COVID-19 related scams, government agencies have issued an informational advisory on potential indicators to look for. Sadly, many scammers are engaged in fraudulent schemes that exploit vulnerabilities created by the pandemic.
Two of the most common scams observed during the COVID-19 pandemic are imposter scams and money mule schemes where actors deceive victims by impersonating federal government agencies, international organizations, or charities. Here at Middletown Valley Bank we believe it is important to share information on these schemes to help our customers recognize potential fraud and protect themselves from falling victim.
In imposter scams, criminals impersonate organizations such as government agencies, non-profit groups, universities, or charities to offer fraudulent services or otherwise defraud victims. While imposter scams can take multiple forms, the basic methodology involves an actor contacting a target under the false pretense of representing an official organization, and coercing or convincing the target to provide funds or valuable information, engage in behavior that causes the target’s computer to be infected with malware, or spread disinformation.
In the case of schemes connected to COVID-19, imposters may pose as officials or representatives from the Internal Revenue Service (IRS). Scammers attempt to defraud and deceive the vulnerable, including the elderly and unemployed, through the solicitation of payments (such as digital payments and virtual currency), donations, or personal information via email, robocalls, text messages. These criminals often use words like “relief,” “fund,” “donation,” and “foundation” in their titles to give the illusion that they are a legitimate organization.
Money Mule Schemes
A money mule is “a person who transfers illegally acquired money on behalf of or at the direction of another.” Money mule schemes, including those related to the COVID-19 pandemic, span the spectrum of using unwitting or witting money mules. In some cases a money mule is an individual who is “unaware that he or she is part of a larger criminal scheme” and the individual is motivated by his/her trust in the actual romance, job position or proposition. Other times, the individual chooses to ignore obvious red flags or acts willfully blind to his/ her money movement activity. Again, the individual is motivated by financial gain or an unwillingness to acknowledge his/her role.
During the COVID-19 pandemic, U.S. authorities have detected recruiters using money mule schemes, such as good-Samaritan, romance, and work-from-home schemes. In work-from-home schemes, for example, COVID-19 money mule recruiters, under a false charity or company label, may approach targets with a seemingly legitimate offer of employment under the pretense of work-from-home jobs, often through internet or social media advertisements, emails, or text messages. Once the target accepts the “employment,” he or she receives instructions to move funds through accounts or to set up a new account in the target’s name for the “business.” The target (i.e., the money mule) earns money by taking a percentage of the funds that he or she helps to transfer per the instructions of the “employer.” U.S. authorities also have identified criminals using money mules to exploit unemployment insurance programs during the COVID-19 pandemic.
These schemes are typically well-crafted and can appear to be legitimate. Your team at Middletown Valley Bank is here to help if you believe you have received a solicitation for these schemes or anytime you suspect someone is attempting to scam you. Should you have questions or concerns regarding your account(s), please contact our Customer Care Team at 1.844.533.9211.