WASHINGTON—The Financial Crimes Enforcement Network (FinCEN) has issued a Financial Trend Analysis on patterns and trends identified in Bank Secrecy Act (BSA) data relating to business email compromises (BEC) in the real estate sector in 2020 and 2021.
The report contains relevant information for the public, particularly individual homebuyers and the multiple entities involved in real estate transactions, according to FinCEN.
Through BEC, FinCEN said scammers target businesses and financial institutions that routinely conduct large wire transfers and rely on email for communication regarding the wires. Perpetrators of BEC in the real estate sector may obtain unauthorized access to networks and systems to misappropriate confidential and proprietary information.
According to FinCEN, the sector remains a target for BEC attacks exploiting the high monetary values generally associated with real estate transactions and the various communications between entities involved in the real estate title and closing processes (e.g., title companies, title agents, closing agents, and escrow companies, and other individuals and entities involved in the title and closing processes).
The Findings
According to FinCEN, its analysis of BEC incidents specific to the real estate sector revealed the following:
- The most common victims of impersonation were individuals and entities involved in the title and closing processes within a real estate transaction.
- Money mules were often involved in the movement of funds following these incidents.
- Nearly 88% of all incidents involved initial transfers of fraudulent funds to accounts at U.S. depository institutions as opposed to accounts outside the United States.
- Fraudsters engaged in multiple types of fraud and used the same accounts to receive funds from these acts as the accounts used to receive funds from real estate BEC scams.
- In several incidents, illicit funds quickly moved from bank accounts to online payment platforms, or were used to purchase convertible virtual currencies, most commonly in the form of bitcoin.
‘Critical Role of Timely Reporting’
FinCEN said the report emphasizes the “critical role of timely reporting” of cyber-enabled crime to enable FinCEN and law enforcement to interdict, freeze, and recover funds stolen through cyber-enabled fraud, such as BEC, through FinCEN’s Rapid Response Program (RRP
Since the inception of the RRP in 2014, FinCEN said the program has aided in the identification and freezing of more than $1.3 billion for U.S. victims of fraud.
FFIEC Names New Chair
Separately, the Federal Financial Institutions Examination Council (FFIEC) has announced that Michael J. Hsu, acting comptroller, Office of the Comptroller of the Currency, is its new chair. Hsu’s two-year term runs through March 31, 2025.
The FFIEC also named Michael S. Barr, vice chair for supervision with the Federal Reserve System, as its new Vice Chair for the same two-year term.
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