Investment platforms on target of Criminals to Launder Stolen COVID Relief funds

Sophisticated fraudsters with expert knowledge in tech are stealing the COVID-19 relief funds from the government. These funds were for helping the businesses that were damaged by the pandemic. Now the fraudsters have found a convenient method to launder the stolen funds: online investment platforms. According to law enforcement officials, criminals have opened accounts in at least four online investment firms. 

Online investment platforms are an easy way to drop money. The fraudster just has to set up an account with stolen credentials and they can easily invest their stolen funds without any proper due diligence. Up until about $100 million of COVID-19 relief funds have been laundered through the online investment platforms since the government passed the CARES Act. 

A source from law enforcement said that the fraudsters have used platforms like Robinhood, TD Ameritrade, E-trade, and Fidelity. 

The government had developed a Paycheck Protection Program and Economic Injury Disaster Loan program to help the small businesses in these tough times. However, both programs have faced the issue of the fraudsters stealing the funds. A report by the inspector general issued Last October revealed that billions of dollars have been lost in fraud due to inadequate control.

“The thieves are loving this stuff. This has been the financial crime bonanza act of 2021,” said Charles Intriago, a money-laundering expert and former federal prosecutor. “Due to the size of the potential fraud, he said, law enforcement is facing a behemoth situation where the money is so massive, and the criminals are looking at it as a great opportunity. They’re salivating at the chance to rip it off.”

According to Roy Doston from Secret Service for financial crimes, a number of investigations are being conducted regarding money laundering. Criminals are taking advantage of the fact that the investment platforms do not require strong due diligence to sign up an account and it is easier to make an account there anonymously compared to opening a bank account and using it for money laundering. 

Law enforcement says that this is another way that has made it difficult to understand where these funds came from. The names of investment companies have not yet been disclosed but an estimation of the amount of money being laundered has been given by the law enforcement authorities.