Global Financial Integrity, a US-based think tank, says the Caribbean has seen an increase 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 contact methods used by perpetrators and the channels used to move related proceeds, as well as current policies and enforcement of the law. answers.
The report also provides five country case studies relating to Antigua & Barbuda, Barbados, Belize, Jamaica and Trinidad & Tobago.
In Jamaica, fraud revenue was estimated at $800 million a year. This translates to $123 billion a year in local currency.
“Fraud, like other crimes, is a constantly 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 citizens of the region, must be alert and responsive to the dynamics of long-standing and nascent fraud schemes.”
According to the report, the most common types of fraud in the Caribbean include those involving upfront fees, particularly scams related to lotteries and other prizes, online shopping and romance, as well as pyramid and Ponzi schemes.
He said pyramid schemes in the region often take advantage of citizens’ comfort and familiarity with “sou-sous,” a legitimate, informal community savings practice.
“The method of contact between the victim and the fraudster often depends on the type of fraud being perpetrated, the sophistication of the schemes and the type of victims involved. For example, lottery scams are mostly telephone-based, while romance scams are carried out online and through social media,” the GFI report said.
According to the GFI, the main channels used to move fraud proceeds are cash smuggling, money service businesses, wire transfers, trade-based money laundering and online money transfer platforms, according to interviews with experts in the topic.
“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. Fraud prevention and investigation in the region faces cultural barriers.
“Some citizens may misperceive governments’ efforts to combat fraud as an attempt to prevent them from making money. Others may be reluctant to report fraud victimization due to cultural stigma,” the report said, noting that “in Jamaica alone, experts estimated the annual value of fraud earnings at up to US$800 million.”
CMC
