Political donation fraud:
A silent multi-million-dollar business
Simply put, fraud is an act of deceit and deception that is almost universally at the core of every economic crime scheme. It succeeds for many reasons. People can generally be good-natured and gullible. They can also be extremely emotional, greedy and naive, all of which leads them to fail to exercise some critical-thinking ability when solicited.
One area of fraud that seems to generate less attention in anti-financial crime( AFC) circles is political donation fraud through political action committees( PACs). Despite the millions of dollars this type of fraud has swindled from the public over the years, it has mostly flown under the radar.
Emotions have always run high when it comes to politics in the U. S. But fueled by a 24-hour news cycle, irresponsible and misleading statements from elected officials and the influence of the media, plus corruption and special interests, it has now reached a fever pitch.
The majority of the public have become savvy enough not to fall for scams about their laptop being infected, owing unpaid parking tickets or a sweepstakes win, but political donation fraud is completely different. It works in part due to the fact that solicitations for donations are a normal and even expected occurrence.
Donating is an easy way of expressing your support for or opposition to a candidate or cause ― feeling involved without ever leaving the comfort of your home. Add to that the rabid partisanship that often blinds the common sense of even the most sophisticated voter and the situation becomes ripe for victimization. Most donors will never even know they have been defrauded.
There are several different types of PACs based on what they are allowed to do or not do, but the general public has virtually no understanding of the differences between them or that they have to be registered with either the state board of elections or the Federal Election Commission( FEC).
Donors to federal elections are the most susceptible as federal elections have the highest profiles and generate astronomical sums of money. They also attract the megadonors, who mostly have their own agenda of seeking political influence.
Senior citizens are the traditional target for any type of fraud which is only heightened when it comes to politics. With time on their hands and disposable income, seniors are often more attuned to the political discourse and campaign rhetoric of the day.
The first red flag
The first step for a financial institution( FI) in combating any fraud is to know your customer. With PACs that means verification with the appropriate regulatory body, state or FEC, with which the PAC is registered. If the PAC is not registered, the account should not be opened or opened restricting any transactions until proof of registration is verified. Do not accept any documentation regarding registration as proof. Verification can only be obtained by accessing the website or making a phone call to the appropriate regulatory body.
Fraudulent websites
Why have your fraud stopped by not registering? Most fraudsters will register their PACs. Why would they not? They will also usually not file the required financial disclosures or will falsify them. Someone committing a crime is hardly concerned about compounding their crime to achieve their goal.
While the public will not think or feel the need to verify registration, it is human nature to view a website that is relevant to your interests. Texts, emails, regular mail and calls from the PAC will even direct you to the site to further legitimize the solicitation and procure the donation. This is where the difference between the untrained eye of the public and the AFC professional comes into focus.
It is easy to make a professionallooking, eye-catching website. Many legitimate websites for candidates are re-created with slight alterations to mimic the legitimate site, such as switching one letter for another or changing the upper and lowercase of the same letter. The slight variations are extremely difficult to discern. A donor may have even visited the legitimate site many times before
ACAMS Today | September – November 2025 43