Deepfake Account Opening: What Passed the Check, and Who Approved It?

Deepfake identity verification and money laundering concerns belong in the same inquiry: who was accepted as the customer, who approved access and where did the money go? If you questioned an identity document or an account approval, your knowledge of the decision may connect the application file to the money that followed.

The Financial Crimes Enforcement Network published an alert on fraud schemes involving deepfake media targeting financial institutions on November 13, 2024. Its fiscal year review identifies the alert among the threats it brought to institutions’ attention. For an insider concerned about failed anti-money laundering controls, the useful question is what the business knew about its own identity checks and what it did with that knowledge.

Deepfake Identity Verification: What Did the Check Accept?

FinCEN describes criminals using generative artificial intelligence to alter or create images for driver’s licenses and passports. They combined generated images with stolen or entirely invented personal information to create fraudulent identities that could pass an institution’s customer checks.

We start with what the account-opening process accepted and the reason it accepted it. The identity submission, verification result and approval explanation are different parts of that question. If a vendor returned a result, we want to understand what that result meant inside your institution and how it affected the decision to open the account.

If you handled the manual review or exception, you can explain what the final approval status leaves out. If you challenged the identity, what did you question? Who received the concern, what answer came back, and did the decision change?

The comparison gets more useful when it reaches the account itself. We ask which account the application opened, what access the approval allowed and whether the concern followed the customer into later review. If the review required another check before approval, we would ask whether that check happened and who recorded the answer.

What Happened After the Account Opened?

According to FinCEN’s analysis of Bank Secrecy Act reporting, criminals successfully opened accounts using fraudulent identities suspected of being produced with generative artificial intelligence. Those accounts received and laundered proceeds from other schemes, including check fraud, credit card fraud and unemployment fraud.

FinCEN also describes institutions detecting manipulated identity documents when they reviewed account-opening files again. Some discoveries followed additional review of accounts showing suspicious activity, such as coordinated activity across similar accounts or funds withdrawn immediately after deposit.

The receiving account’s activity gives us the next set of questions: who sent the money, who received it and how it moved onward. Identity information and transaction information can sit with different participants.

If a later fraud investigation brought you back to the original identity file, we would examine what prompted the return. What did the later review reveal about the original submission? Was that information available when the account was approved, or did it emerge afterward?

The exchange’s decisions about customer access matter after onboarding, too. A sanctions case involving Kraken, operated by Payward illustrates that timing problem. In its enforcement notice, the Office of Foreign Assets Control described apparent violations involving people apparently in Iran whose access continued after onboarding checks. What happened once the opening check was over is the question an insider can answer.

What Proof Do You Need as a Whistleblower?

Useful evidence connects the questioned identity, the approval decision and the account’s use. We work through those connections with the person who knows the process. That may be an onboarding specialist, a compliance investigator, an auditor, a transaction-monitoring engineer, an operations employee or a manager responsible for exceptions.

An onboarding specialist, an investigator and an engineer may each hold a different piece of the same decision: the submission, the account activity or the test that exposed a weakness. We put those pieces together with you, including who received the concern and who had authority to act.

Questions about handling information connected to suspicious activity reporting belong in a conversation with our whistleblower experts. We work with you on the underlying transactions, your firsthand knowledge and the decisions you can explain.

Why Know Your Customer Checks Continue After Account Opening

Bank customer due diligence includes understanding the relationship, maintaining a risk profile and updating information according to risk. That broader view gives us a useful comparison for an identity concern: what did the institution understand about the customer, and how did the account actually behave? We would examine both with an employee who saw a contradiction.

The records may answer different questions even within the same relationship. A bank’s inquiry into who owns a company, a payment firm’s transfer records and an exchange’s internal ledger can each explain part of the movement of money. We bring that wider inquiry back to the individual whose identity was accepted and the account that person could use.

When Testing Finds a Problem

A testing result gives us a specific question to put beside the approval history: who knew about the weakness, and what decision followed? If your team found a problem and accounts continued to receive money, we would examine the finding, the response and the affected activity together.

The Wharton Initiative on Financial Policy and Regulation’s 2024 paper Anti-Money Laundering: Opportunities for Improvement argues that the system has to reflect the resources, incentives and information people actually have. It describes research in which compliance officials see themselves as aligned with law enforcement but often feel that others inside their firms treat their work as an expense to minimize.

We see the problem with expecting compliance staff to protect the business while treating their work as a cost to squeeze. If you raised a deepfake identity concern, the response matters alongside the technical finding. Did reviewers have the information, time and authority to act, and who decided whether access would continue?

From Account Activity to an Investigation

Bank Secrecy Act reporting supplies financial intelligence that investigators use to generate leads and advance investigations. The Financial Crimes Enforcement Network describes that use in its fiscal year review. For an insider, the contribution we examine is the connection between the account activity and the institution’s decisions about the customer.

The alert also gives us a specific point of comparison with your institution’s own decisions. If you raised a deepfake identity verification concern after the alert, we would examine how the institution assessed that concern against its controls. The question is who considered the weakness you identified and what happened to the affected accounts.

Which Whistleblower Program Fits the Conduct?

The Financial Crimes Enforcement Network’s whistleblower program covers information about Bank Secrecy Act violations and other covered conduct. Its award law provides qualifying whistleblowers collectively 10% to 30% of qualifying collections from covered actions exceeding $1 million. We assess the institution’s controls, the account activity and the decisions you know about to identify the whistleblower program that fits the conduct.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. We work through the program choice with you and money laundering whistleblower lawyers, so your account of what happened is aimed at the right case.

You Know Why the Account Was Approved

If you questioned an identity check and know why the account still received approval, speak with our whistleblower experts about that decision. We connect your knowledge of the verification process to the account activity and build your strongest money laundering whistleblower case beside you. We bring in money laundering whistleblower lawyers who know bank onboarding and verification failures, and we remain your partners as the case moves forward.