Deputy Commissioner of Police Fitz Bailey is urging companies to be more forthcoming regarding fraudulent attacks, noting that only one-fifth of crimes are reported and that often, companies make the decision not to report in order to protect their reputation.
But opening up to the police on the extent of the threat they face could assist with a better assessment of the risk and lead to better fraud-prevention strategies, he suggested.
He also insisted that firms had a moral and ethical obligation to be honest.
“In terms of reports of fraud and corruption, under 20 per cent of people who are victims report. So, when we give an estimate, it is very conservative. We can only respond and report what has been reported,” he appealed to the financial sector on Thursday at the annual JBA/JIFS Anti-Fraud Seminar, sponsored by the Jamaica Bankers Association and Jamaica Institute of Financial Services.
Bailey argued further that local and international fraud were constraints on large investments.
He also charged that the used-car sector and other segments of the economy in Jamaica have become major channels for rinsing funds for lottery scamming.
“Businesses experiencing fraud have to consider reputation versus accountability. When I was younger, banks fired people when they committed fraud. We had arrests almost every day. But over time, the cost for taking those actions became more important,” said the police officer.
“When businesses are impacted by fraud, there is the issue of whether to report it, bring in outside help or run the risk if the fraud is publicised, or quietly dismiss [perpetrators].”
“We must report,” he demanded.
The policeman argued that the onus was on the various operators in the economy, including government entities, financial institutions, and asset acquisition companies such as car dealers and real estate agents, to know their clients to ensure that the cash flowing through their sectors is legitimate.
In February, it emerged once again that Jamaica was facing the possibility of being blacklisted because of non-compliance with the Financial Action Task Force (FATF) anti-money laundering requirements.
“It is not something to be taken lightly. Everyone has a role to play to ensure that Jamaica is able to compete globally without any form of restriction,” Bailey said.
“Ethics – that word has no meaning to some people,” he charged. But everyone has legal and moral responsibilities to their society, and that should be a primary consideration once fraud is detected, he argued.
“We understand that businesses are in the business of making a profit, but to ensure the criminal economy does not consume the legitimate economy”, fraud must be reported, he said.
“There are some things which are not regulated but which are an ethical responsibility. You are governed not only by regulations, but by ethics,” the deputy police commissioner said.
There are three primary units that deal with fraud: the Fraud Squad and MOCA, or Major Organised Crime and Anti-Corruption Agency, within the Police force, and FID, or the Financial Investigation Division, within the Ministry of Finance and the Public Service.
Giving an update on reported fraud, Bailey said between 2018 and 2022, there were 2,932 cases that resulted in 805 arrests. These included both electronic and general fraud. MOCA dealt with 79 cases of fraud, made 180 arrests, and secured 155 convictions during the period. FID, which focused on asset forfeiture, had 105 cases reported with 56 arrests and 17 convictions.
The value of the fraud over the five-year period was estimated at $3.19 billion in local currency, US$31,261, and ?252,000.
Meanwhile, matters in court spanned $1.2 billion and US$5 million of fraud. And cash seized by FID amounted to $130 million and US$13 million.
“We now live in an age of globalisation, where technology has supported growth of the financial sector. Trillions move in and out of economies with the click of a button. This has benefited not only legitimate players, but players in the underworld who defraud billions each year,” said Bailey.
Worldwide, the losses from fraud account for approximately five per cent of global GDP. The Association of Fraud Examiners estimates the value of fraudulent transactions at US$4.7 trillion.
“When motive aligns with poor controls it opens the opportunity for fraud. It is important that we have policies and procedures well documented, and that persons in institutions are aware and highly familiar [with them],” the policeman said.
He added that the counterfeiting of goods is a significant problem in Jamaica, with illicit goods competing with legitimate products and undermining investments made by businesses.