On October 30, 2026, alongside other senior U.S. officials, Secretary of the Treasury Scott Bessent announced several initiatives to combat the rampant fraud in Minnesota. In line with this, FinCEN issued an Alert to urge financial institutions1 to be vigilant in detecting, identifying, and reporting suspicious activity arising from certain cross-border payments involving U.S.-based money services businesses (MSBs).
MSBs provide essential financial services to underserved communities and facilitate international money transfers, but their cross-border relationships can create vulnerabilities when due diligence and transaction monitoring are inadequate. FinCEN identified more than $8 billion in suspicious foreign-agent-directed payments between 2021 and 2025, some of which may have facilitated terrorist financing and other illicit activities. To address these risks, FinCEN has identified the following red flags to help financial institutions detect, prevent, and report suspicious activity connected to foreign-agent-directed transactions:
Red Flags for Principal MSBs
A foreign agent directs a payment (including for the purported purpose of settlement of obligations between the principal MSB and the foreign agent) to a third-party entity not covered by the agent clearing agreement.
A foreign agent regularly directs payments (including for the purported purpose of settling obligations between the principal MSB and the foreign agent) to third-party entities in thirdcountry jurisdictions such as China, the UAE, Egypt, and East African countries, including Kenya, Uganda, and Djibouti.
A foreign agent provides non-descriptive, repetitive, or unsupported reasons for the payment to a third-party entity (e.g., “settlement,” “services,” or “business expense”).
A foreign agent is reluctant or fails to provide appropriate documentation (e.g., invoices, contracts, or orders) to the principal MSB to support payment instructions, or the foreign agent provides the documentation but it is inconsistent or otherwise contains indicia that the requested payment may not relate to legitimate provision of goods or services.
A foreign agent directs payments to third-party entities with no apparent relationship to the foreign agent (e.g., a textile company, a general trading company, a company with no web presence, or a newly created company).
A foreign agent is reluctant or fails to provide evidence to confirm that it conducted appropriate due diligence on the third-party entity to which a payment is directed.
The timing, volume, or nature of the payments directed by the foreign agent is not consistent with the purported settlement arrangement or otherwise suggests that the payments do not reflect the foreign agent’s legitimate commercial transactions.
The foreign agent is unwilling or unable to provide information regarding its licensing or regulatory status, business operations, or applicable AML/CFT controls, particularly when other circumstances raise concerns about the legitimacy of its activities.
A foreign agent regularly directs payments to third-party recipients in round dollar (or near-round dollar) amounts.
Red Flags for Banks Providing Services to MSBs
A customer MSB sends payments to a foreign entity that does not have the profile of a recipient of bulk MSB funds (e.g., a textile company, a general trading company, a company with no web presence, or a newly created company).
When the bank or other financial institution requests additional information about the transfer(s), the customer MSB is reluctant or fails to provide documentation (e.g., invoices, contracts, or orders) to substantiate the underlying purpose of the payment.
A customer MSB sends a large payment or regular payments to a third-party entity in a jurisdiction (such as China, the UAE, Egypt, and East African countries, including Kenya, Uganda, and Djibouti) that is inconsistent with the primary population served by the MSB.
The timing, volume, or nature of the payments of a customer MSB is not consistent with a settlement arrangement or otherwise suggests that the payments do not reflect legitimate commercial transactions.
A customer MSB sends repeated foreign-agent-directed payments in round dollar (or near-round dollar) amounts.
Read the Treasury’s press release here.
The Alert can be found here.