After a period of relative leniency in the early months of the COVID-19 pandemic, bank regulators in the coming months are expected to begin taking a tougher stance and imposing stiffer penalties for COVID-19-related money laundering activities.
In an October 7 article in S&P Global Market Intelligence, Paris-based counsel Joydeep Sengupta, a member of Mayer Brown's Compliance, Regulatory & Investigations team, explains how in 2021, regulators are on track to focus on large-scale fraud cases related to contracts for medical supplies, masks and other pandemic-driven orders. He drew upon one particular case that turned regulators' heads, in which fraudsters duplicated a Dutch face mask supplier's website to process an €880,000 order for 10 million non-existent masks.
According to Joydeep, regulators may be “more lenient” when it comes to activities that took place during the onset of the pandemic, or what he calls a more “unpredictable” phase. But banks caught in scandals further along in the pandemic will face a "high risk of regulatory enforcement."
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