On April 15, 2024, FinCEN, in close coordination with the Department of State’s Diplomatic Security Service (DSS), issued a Notice to financial institutions on fraud schemes related to the use of counterfeit U.S. passport cards. The Notice provides an overview of typologies associated with U.S. passport card fraud, highlights select red flags to assist financial institutions in identifying and reporting suspicious activity, and reminds financial institutions of their reporting requirements under the BSA.
According to the Notice, the DSS has identified a concerning increase in the use of counterfeit U.S. passport cards by individuals and fraud rings to gain access to victim accounts at financial institutions nationwide since 2018. This fraud occurs in person at financial institutions and involves an individual impersonating a victim by using a counterfeit U.S. passport card that contains the victim’s actual information.
The scheme is done by illicit actors acquiring a potential victim’s personal identifiable information (PII) from either the U.S. Mail or the Darknet, The actors then purchase a counterfeit U.S. passport card that includes a passport photo of themselves or of a “money mule” they have recruited to participate in the scheme, but which reflects the PII of the victim. After creating a fraudulent U.S. passport card, the illicit actor or the money mule will use the fraudulent identification to impersonate the victim at a branch of the victim’s known financial institution, usually trying to avoid branches that the victim frequents to evade detection by employees who may be familiar with, or recognize, the victim. Upon successfully bypassing account access security protocols at the branch location, DSS has observed that illicit actors may attempt the following transactions:
The illicit actor will seek to gain information about a victim’s account, by, for example, asking questions regarding the account balance and withdrawal limits. Once such information is obtained, the illicit actor will quickly withdraw large amounts of cash below the Currency Transaction Reporting (CTR) threshold, purchase cashier’s checks or money orders, or initiate wires. To evade the CTR threshold, the illicit actor may visit other bank branch locations and repeat the process, using the same victim’s information;
The illicit actor cashes stolen or forged checks to obtain funds from a victim’s account; or
The illicit actor establishes a new joint account, using the victim’s account information, with a second illicit actor as a joint owner. After the joint account is established in person, the illicit actor will then transfer funds out of the victim’s existing account into the newly established joint account. The funds in the joint account are then wired to other accounts wholly controlled by illicit actors.
FinCEN has has identified the following red flag indicators to help detect, prevent, and report potential suspicious activity related to the use of counterfeit passport cards in identity theft and fraud schemes:
Technical Red Flags
The photo on the presented U.S passport card has a white, blurry border; a dark gray square surrounding the photo; or is in color. Legitimate U.S. passport cards are laser engraved, which produces a clear and crisp grayscale portrait image.
The photo of the account holder on file does not match the individual present who is pictured in the counterfeit U.S. passport card.
The card bearer’s date of birth and other areas of text are flat and do not feel raised when touched. Legitimate U.S. passport cards have tactile text on certain areas of the card and should feel textured.
The holographic U.S. Department of State seal is missing or has been substituted with a seal from an unrelated agency.
The smaller portrait is blurry and does not contain micro-printed text with information specific to the bearer of the card, or the portraits are of different people. On legitimate U.S. passport cards, the secondary photo is a complex image that contains personalized details that are microprinted to create the image.
The signature of a customer presenting a U.S. passport card for identification does not match the customer’s signature card on file.
Behavioral Red Flags
A customer presenting a U.S. passport card as identification may not know or be able to reference personal identifiers, including date of birth or social security number.
If a customer presenting a U.S. passport card as identification does know or is able to reference personal identifiers, including date of birth or social security number, they nevertheless lack basic account knowledge and are excessively interested in specific details about their account balances and withdrawal limits.
A customer appears to be following directions by phone from a third-party.
A customer presents a U.S. passport card for identification and opens a new joint account with a third-party with whom the customer has no prior relationship.
A customer conducts transactions characteristic of U.S. passport card fraud at branch locations outside of their geographical footprint.
Financial Red Flags
A customer presents a U.S. passport card as a form of identification and subsequently withdraws cash, purchases a cashier’s check, purchases money orders, or initiates wire transfers for a large amount for no business or apparent lawful purpose. \
A customer presents a U.S. passport card as a form of identification and attempts to negotiate an uncharacteristic, sudden, or abnormally large volume of checks made payable to cash.
A customer presents a U.S. passport card as a form of identification, asks for daily withdrawal and transfer limits, and subsequently withdraws cash, initiates a wire transfer, or purchases a cashier’s check made payable to a third party.
A customer presents a U.S. passport card before transferring funds out of an existing account to a recently established joint account, and the funds are then rapidly withdrawn or wired from the joint account to a separate, unrelated account.
A customer makes withdrawals from an account at multiple branch locations for no business or apparent lawful purpose using a U.S. passport card as identification.
A customer engages in behavior that suggests efforts to evade the CTR filing requirements (e.g., the customer alters or cancels a transaction when informed of the CTR filing requirement, or engages in structuring by conducting multiple cash withdrawals below $10,000 during one business day).
Read FinCEN’s news release here.
The full Notice can be found here.