Social Media Influencers Introduce New AML Risks to Banks


Social media provides us a medium to interact and stay connected globally, but these platforms are often exploited by sophisticated money launderers and fraudsters. Is your financial institution equipped to identify illicit activity and mitigate potential money laundering risks stemming from abuse of social media platforms?

What started as a simple way to connect with one another has evolved into a sophisticated network where users are now making a living through online activities. In 2019, influencer marketing was valued at over $6.5 billion, with Google searches for “influencer marketing” growing over 1500% over the past three years.

Influencers are social media users who have large numbers of followers. A fashion or makeup brand, for example, may reach out to these influencers and pay them to promote the brand and their products, leveraging their large following to reach more potential customers. A social media influencer can be any individual that has the appearance of having credibility, as well as the ability to convince a following of their legitimacy.

Tailor your transaction monitoring to detect risk indicators

Do you have any customers whose funds originate from social media activity? When reviewing accounts belonging to users who earn or transact money through social media platforms, you should establish expected transaction patterns and configure your suspicious activity monitoring system to detect emerging risks and AML typologies. You will also want to update policies and procedures surrounding these emerging lines of business and associated risk to include further due diligence.

Here are three examples of how social media platforms have been and can be misused by wrongdoers, what to look for, and some criteria you should consider to help protect your institution. After reading about the below scenarios, think about how your financial institution identifies these accounts, risk rates them, and tailors account and transaction surveillance systems to identify suspicious activity.

1. Illicitly funded Twitch Bits

Twitch is the world’s leading live streaming platform for gamers. Twitch members create video content for viewers, and these viewers can support their favorite streamers by donating pre-purchased Twitch Bits. Twitch Bits are considered an open loop virtual currency; they can be purchased with USD and donated to a streamer of their choice. One Twitch Bit is the equivalent of $0.01 USD. The streamer can cash out their Twitch Bits once their Twitch Bit total is above $100 USD.

The simplicity of creating accounts, of the Twitch Affiliate program, and the availability of payment options, can make this platform a viable option for bad actors to move illicit funds.

The only requirement to create an account is an email address, which can be exploited by Twitch users who utilize numerous fabricated email addresses that are opened for the sole purpose of a scheme. Twitch Bits can be purchased by using a credit card, PayPal, or a linked Amazon account. In order to receive Twitch Bits, a streamer must complete the Twitch Affiliate program requirements, comprised of a short list of straightforward streaming benchmarks.

A streamer who has illicit funds may create viewer accounts and fund the accounts with the illicit proceeds. In this scheme, the illicit funds are sent to the streamer via Twitch Bits, which are then given the appearance of legitimate streaming proceeds by the network controlled by the streamer. The funds are then later cashed out at the applicable threshold established by Twitch.

2. Instagram used for fraud

Influencers may also profit by taking advantage of their followers and asking them to unwittingly assist in their illicit schemes. Kayla Massa was a 22-year-old Instagram and YouTube influencer who posted video blogs and tutorials related to makeup products for her 330,000 followers. Then, Massa began using her platform to launder funds. Massa acquired stolen money orders from the United States Postal Service in New Jersey, and posted Instagram stories enticing her followers with messages such as the following:

“If you have a bank account and trying make some bread dm me (serious ppl only) 💰💰💰”

Massa would receive bank account information, including debit card numbers and PINs from her followers. Once in control of the accounts, she would deposit the stolen money orders and deplete the followers’ accounts via debit card purchases, ATM withdrawals, and purchases of money orders. In many instances, by the time Massa used her followers’ accounts for her own purchases and deposited the money orders, the victims’ bank identified the checks as fraudulent and recalled the funds, leaving the victim with a negative balance. When the victims attempted to contact Massa, they discovered they had been blocked via Instagram.

3. Powerful tool for investigators

Social media can also provide aid in an investigation: users may give away their location at a specific time by “checking in,” or often use the platform to show off to their followers. Twenty-six-year-old Jenny Ambuila, a recent University of Miami graduate, was an Instagram influencer who often posted pictures of her lavish lifestyle. Ambuila, originally from Colombia, would post pictures of Lamborghinis, expensive jewelry, designer handbags, and vacations to exotic places, including Milan and Ibiza, portraying an affluent image to the thousands of users who followed her. The spending was excessive enough to alert investigators, who began monitoring Ambuila to determine the sources funding her lavish lifestyle.

After looking into the influencer’s activity, investigators alleged that Jenny’s father, Omar Ambuila, was a mid-level customs officer at the Colombian seaport of Buenaventura and was accepting millions of dollars in bribes in order to allow untaxed goods to pass into Colombia. Omar’s average monthly salary was within the range of $3,000 and was expected to be receiving around $600,000 since 2012 as the port inspector. The illicit funds were obfuscated by the use of dividends and front companies that were utilized by relatives to acquire goods and services. The illicit funds received by Omar Ambuila purportedly funded Jenny’s college degree, as well as financing his daughter’s luxurious lifestyle.

What can a compliance professional do to better identify and assess these customers?

Compliance professionals must consider the potential need for additional due diligence on entities and individual customers that are operating as social media influencers. Some items to consider include:

  • To the extent possible, view the influencer’s social media posts and assess whether their activity coincides with their stated line of business and source of funds.
  • View the influencer’s social media posts for unusual remarks or activity.
  • Verify with the influencer who are their primary customers (i.e., makeup brand, clothing line, etc.) Then, when reviewing the customer, identify whether the counterparties involved in the transactions are within stated purpose and nature of the account.
  • If they are considered an influencer but are receiving numerous payments from individuals as opposed to a sponsor, the social media platform, or a brand, does it make sense for the customer to have multiple originators to one beneficiary relationship?
  • Is the customer receiving a large amount of transactions, especially below reporting thresholds?
  • Can you establish the length of time that the influencer has been operating? Can you identify how large their following is? Does the transactional activity appear to be within reason of their social media following/presence?
  • In many cases, you can employ external research to determine the average influencer earnings in your customer’s niche and compare the numbers. If their figures are much higher than average, does their online presence (following) coincide with the transaction volume?
  • Does the customer have any form of documentation, such as a compensation clause, that clearly articulates the customer’s source of funds, and how much the customer would be paid per post? Does this information coincide with the current transactional activity?

The use of social media has evolved from simply connecting with acquaintances to generating billions in income for many users who have learned to leverage the various platforms for personal gain. Although social media poses new and emerging risks for financial institutions as a result of this evolution, concerns can be mitigated by having a diligent and accurate customer due diligence process and dynamic account and transaction surveillance system. You should have a clear understanding of the source of funds for any customers who are social media influencers or otherwise generating income through social media activity.

As with any emerging trend, education and training will continue to be an excellent way to keep your employees aware of new schemes. Encourage those within the compliance department to speak up and share news and insights. As banks and financial institutions open their doors to this new type of customer, they must evolve their due diligence and monitoring practices to identify illicit activity.

If you want to learn more about emerging money laundering and compliance risks and how to mitigate them to protect your institution, reach out to me or another member of our Risk Advisory Services team.

  1. karlene Delfish says:

    I will like to know more about emerging money laundering and compliance risks and how to mitigate them to protect my institution.

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