FinCEN Issues Notice on Growing Financial Scams with Counterfeit Passport Cards

April 16, 2024

FinCEN (Financial Crimes Enforcement Network) and DSS (Diplomatic Security Service) issues notice on the

“Use of Counterfeit U.S. Passport Cards to Perpetrate Identity Theft and Fraud Schemes at Financial Institutions”.

They issued a notice and expressed concerns regarding U.S. fake passports and financial fraud schemes.

The data was collected and it’s alarming to know that there has been an increase in fraudulent individuals using counterfeit US passport cards since 2018. The main issue related to this is that it helps groups gain unauthorized access to victims’ accounts at financial institutions across the country. The counterfeit passport cards have validity in traveling to regions such as Bermuda, the Caribbean, Mexico, and Canada.

The fraudulent passports resulted in an actual loss of 10 million dollars and a loss of 8 million dollars was attempted loss, with victims more than 4000 in the U.S. from 2018 to 2023.

The Deputy Assistant Director from the DSS investigation office Greg Batman said,

“The Diplomatic Security Service remains committed to protecting the American people and financial institutions from individuals attempting to conduct financial crimes using Department of State-issued identification documents. We believe that this Notice will help financial institutions identify and prevent the fraudulent use of passport cards”.

Tactics and Methods Employed by Fraudsters

The personal information of victims is obtained by Fraudsters from different sources, such as the U.S. Mail and the Darknet. They produce fake passport cards that have their image or “money mule” image but show the victim’s information.

The notice features a case study highlighting identity theft-related fraud issues. The mastermind of the bank fraud scheme (1.9 million dollars) Norman Malik, was given a sentence of more than 13 years in federal prison along with his co-conspirators for conspiring to commit, passport fraud, bank fraud, and identity theft. They defrauded customers from Chase Bank by extracting their information using their user names and identity information and then making fake passports with pictures of conspirators.

Red Flags to Detect Counterfeit U.S. Passport Card Fraud

The notice lists 17 technical, behavioral, and financial warning signs of the typology. Technical signs include blurry or colorful images, a lack of add-ons, and a lack of holographic seals. Behavioral flags include customers’ unfamiliarity with personal details, following third-party instructions, and unusual transactions. Financial red flags include large withdrawals, negotiation of high check volumes, and rapid interbank transfers, as well as practices that evade reporting requirements.

Call to Action

FinCen has issued specific guidelines on filing SARs related to the use of fake passports and subsequent financial crime. FinCEN requests that banks submit SARs reporting suspicious activity by reporting “FIN-2024-NTC1” in field 2 of the SAR and adding “Passport Card” in field 34(z) of the SAR. In addition to filing a SAR, financial institutions must refer potential victims of U.S. passport fraud to the DSS. Reports can be submitted by contacting the nearest DSS office or by email to [email protected].