8 months ago
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A leading expert on banking fraud is calling for lengthy sentences for bank employees who steal funds while on the job.
Dane Nicholson, co-chair of the Jamaica Bankers Association’s Anti-Fraud Committee, said the laws governing banking fraud are outdated and that his colleagues who steal from their employers should be sent away for a long time.
“I would like to express my disappointment in a recent case where someone stole $74 million and was only given two years (in prison). That sends the wrong signal across the country. Special legislation needs to be crafted to punish those who work in financial institutions who breach their fiduciary responsibility. They should be punished harshly – at least 10 years in prison,” Nicholson said.
He was referring to the case involving former National Commercial Bank employee Khadene Thomas, who was sentenced to 24 months in prison in June after pleading guilty to fleecing three of the institution’s customers of a total of $74.5 million. Nicholson is the head of fraud prevention at National Commercial Bank.
In February, Thomas had admitted to three counts of larceny as a servant and 31 counts of uttering forged documents. She was charged with larceny and offences under the Cybercrime Act in January 2023.
Speaking at the JBA-JIFS annual anti-fraud seminar in Kingston on Thursday, Nicholson detailed a range of fraudulent schemes that have emerged from persons inside and outside of the banking system since the first credit card scams in 2004.
The fraud specialist related the tale of a vice-principal of a school in Jamaica who was befriended by a man she met online. A relationship blossomed, and soon, the two were “engaged”.
In this case of a ‘romance scam’, the “fiancé” said he was serving in the military and kept giving excuses why he was unable to come to Jamaica. Meanwhile, the educator “sent every dollar in her bank account” to the fraudster.
She also applied for a loan of $3 million to be sent to him, which was flagged by the bank.
“She stormed into my office asking, ‘Why are you holding up my fiancé’s money?’” Nicholson said of the tricked educator.
But even after explaining that she was the victim of a romance scam, the vice-principal refused to believe the bank.
“She was sending her life savings to this man. I don’t know how she is going to get back that money,” Nicholson said.
A worldwide phenomenon, the cost of electronic fraud is such that the GDP from its proceeds would make it the sixth richest country in the world.
The scammers utilise different methods, including ‘friendly fraud’, in which persons within a household use a bank card for purchases online, which are later disputed with the bank. This usually involves a child using their parents’ card without their knowledge and is the number one rising fraud since the COVID-19 pandemic, Nicholson said.
There is also ‘pig butchering’ in which several hundred persons in online chat groups are recruited to invest in a particular scheme. However, like a Ponzi scheme, only those who enter first earn on their money while the others are left penniless.
Another type is the ‘JavaScript skimmer’, where special computer programmes are used to guess the last 10 digits of a 16-digit credit card number, and ‘loader fraud’, where persons lend out their banking details in exchange for a loan, only to be stuck with a loan taken out on the account by the fraudster.
Nicholson said such fraudulent activities can only be countered through more public education.
Meanwhile, guest speaker at the seminar, Dr Herbert Gayle, senior lecturer in anthropology at the University of the West Indies, called on the bankers to do more to assist the vulnerable communities they serve.
Gayle noted that most Jamaicans had little empathy for the banks when they lost money through fraud.
“When people feel dislocated from a society, they will hurt you because they are part of a group called vulnerable to mobilisation,” he said.
“Jamaicans literally think that banks are part of Babylon (the oppressors). Be visible in social interventions. Put on your bib and go out on the streets and let people know you’re not just taking their money, you’re giving back, because once you’re branded Babylon in Jamaica, nobody will empathise when you get jook (robbed),” Gayle remarked.
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