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Think tank says financial crimes on the rise in the Caribbean

Global Financial Integrity, a think tank based in the United States, says the Caribbean has seen an uptick in financial crimes, including fraud schemes, “involving hundreds of millions if not billions of dollars in illicit proceeds each year”.

In a new report released this month, GFI examined the prevalence and dynamics of financial crime, the actors and facilitators involved, the methods of contact used by perpetrators, and the channels utilised to move the associated proceeds, as well as current policy and law enforcement responses.

The report also provides five country case studies relating to Antigua & Barbuda, Barbados, Belize, Jamaica, and Trinidad & Tobago.

In Jamaica, fraud proceeds were estimated at US$800 million per year. That translates to $123 billion annually in local currency.

“Fraud, like other crimes, is a continuously evolving phenomenon that reacts to local, regional, and international developments,” said GFI President and CEO Tom Cardamone. “The public and private sectors, as well as the region’s citizens, must be alert and responsive to the dynamics of long-standing and nascent fraud schemes.”

According to the report, the most common fraud types in the Caribbean include those involving advance fees, specifically scams related to lottery and other prizes, online shopping and romance, as well as pyramid and Ponzi schemes.

It said pyramid schemes in the region frequently take advantage of citizens’ comfort and familiarity with “sou-sous”, a legitimate, informal community savings practice.

“The method of contact between victim and fraudster is oftentimes dependent on the type of fraud being committed, the sophistication of the schemes and the type of victims involved. For example, lottery scams are largely phone-based while romance scams are perpetrated online and through social media,” the GFI report stated.

According to the GFI, the primary channels used to move the proceeds of fraud are cash smuggling, money service businesses, bank transfers, trade-based money laundering, and online money transfer platforms, according to interviews with subject matter experts.

“Caribbean countries have laws in place to cover the types of fraud discussed in this report; however, many countries face challenges when translating these laws into effective enforcement actions. The prevention and investigation of fraud in the region faces cultural barriers.

“Some citizens may incorrectly perceive governments’ efforts to combat fraud as an attempt to prevent them from making money. Others may be hesitant to report fraud victimisation due to cultural stigma,” the report said, noting that “in Jamaica alone, experts assessed the annual value of fraud proceeds at up to US$800 million”.


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