Authors: Jeremy Clifton, CRCM, CAMS and Nick Milcarek
On March 30, 2023, FinCEN issued an alert regarding a concerning increase in business email compromise (BEC) in the real estate sector and how the Rapid Response Program (RRP) can help combat this issue. Recent analysis of data has shown that homebuyers have been disproportionately affected by fraudsters gaining unauthorized access into supposedly secure networks and stealing important information from home buyers, title agents, attorneys, and/or others involved in the loan closing processes. According to FinCEN, about 88% of the fraudsters initially transfer the stolen money into a domestic U.S account first before it is transferred elsewhere which may involve foreign transfers and/or cryptocurrency.
How RRP Works
Problems like these highlight the importance of FinCEN’s Rapid Response Program, (RRP) which works in tandem with federal and local law enforcement agencies to help victims identify losses and freeze compromised accounts. Since inception in 2014, the program has aided victims in identifying and freezing over $1.3 billion. To begin the RRP, law enforcement must be contacted immediately. The FBI’s Internet Crime Complaint Center (IC3) or the nearest secret service office are the best avenues for this approach (Secret Service contact information below). It is important to note that while recovery of the stolen amount is not guaranteed, reporting the crime within 72 hours gives FinCEN and law enforcement the greatest chance of financial recovery for the victim. After consent is given to law enforcement for access, FinCEN may freeze all related accounts to stop any other fraudulent transactions. If the fraudster’s account is domestic, FinCEN and law enforcement work quickly to contact the beneficiary’s financial institution and pinpoint the stolen funds. If stolen funds were found to be transferred to an international account, FinCEN reaches out to that jurisdiction to initiate the financial fraud kill chain (FFCK) and assist the foreign government with the status and information gathering regarding the stolen money. There are some identification factors that are crucial for financial institutions to relay when reporting theft via the RRP; however, time is of the essence to recover funds so institutions should not delay in activating the RRP.
It is a good idea to establish a relationship with your local FBI office and Secret Service office before you need them in an emergency situation as that may help speed up the process. Also, if your institution ends up filing a SAR after utilizing the RRP, that information would need to be included on your SAR form along with the RRP case number if provided.
For more information and guidance on BEC and RRP, see the links below.
BEC in Real Estate Financial Trend Analysis from FinCEN: Financial_Trend_Analysis_BEC_FINAL.pdf (fincen.gov)
BEC FinCEN alert: FinCEN Analysis of Business Email Compromise in the Real Estate Sector Reveals Threat Patterns and Trends | FinCEN.gov
Rapid Response Program FACT SHEET: RRP Fact Sheet Notice FINAL 508.pdf (fincen.gov)
Secret Service Offices: http://www.secretservice.gov/field_offices.shtml
On March 30, 2023, FinCEN issued an alert regarding a concerning increase in business email compromise (BEC) in the real estate sector and how the Rapid Response Program (RRP) can help combat this issue. Recent analysis of data has shown that homebuyers have been disproportionately affected by fraudsters gaining unauthorized access into supposedly secure networks and stealing important information from home buyers, title agents, attorneys, and/or others involved in the loan closing processes. According to FinCEN, about 88% of the fraudsters initially transfer the stolen money into a domestic U.S account first before it is transferred elsewhere which may involve foreign transfers and/or cryptocurrency.
How RRP Works
Problems like these highlight the importance of FinCEN’s Rapid Response Program, (RRP) which works in tandem with federal and local law enforcement agencies to help victims identify losses and freeze compromised accounts. Since inception in 2014, the program has aided victims in identifying and freezing over $1.3 billion. To begin the RRP, law enforcement must be contacted immediately. The FBI’s Internet Crime Complaint Center (IC3) or the nearest secret service office are the best avenues for this approach (Secret Service contact information below). It is important to note that while recovery of the stolen amount is not guaranteed, reporting the crime within 72 hours gives FinCEN and law enforcement the greatest chance of financial recovery for the victim. After consent is given to law enforcement for access, FinCEN may freeze all related accounts to stop any other fraudulent transactions. If the fraudster’s account is domestic, FinCEN and law enforcement work quickly to contact the beneficiary’s financial institution and pinpoint the stolen funds. If stolen funds were found to be transferred to an international account, FinCEN reaches out to that jurisdiction to initiate the financial fraud kill chain (FFCK) and assist the foreign government with the status and information gathering regarding the stolen money. There are some identification factors that are crucial for financial institutions to relay when reporting theft via the RRP; however, time is of the essence to recover funds so institutions should not delay in activating the RRP.
It is a good idea to establish a relationship with your local FBI office and Secret Service office before you need them in an emergency situation as that may help speed up the process. Also, if your institution ends up filing a SAR after utilizing the RRP, that information would need to be included on your SAR form along with the RRP case number if provided.
For more information and guidance on BEC and RRP, see the links below.
BEC in Real Estate Financial Trend Analysis from FinCEN: Financial_Trend_Analysis_BEC_FINAL.pdf (fincen.gov)
BEC FinCEN alert: FinCEN Analysis of Business Email Compromise in the Real Estate Sector Reveals Threat Patterns and Trends | FinCEN.gov
Rapid Response Program FACT SHEET: RRP Fact Sheet Notice FINAL 508.pdf (fincen.gov)
Secret Service Offices: http://www.secretservice.gov/field_offices.shtml
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