US-based Global Financial Integrity says fraud, like other crimes, is a constantly evolving phenomenon that reacts to local, regional and international developments. (Photo: Jeff Wasserman)
WASHINGTON, DC, United States (CMC) – US-based Global Financial Integrity (GFI) says the Caribbean has seen an increase in financial crimes, including fraud schemes, in recent years.
In its latest report titled ‘Financial Fraud in the Caribbean’, released here on Wednesday, the Washington-based think tank said financial fraud “has a widespread footprint across the region, involving hundreds of millions, if not billions of dollars in illegal income every year, affecting the economic security of countries and the region as a whole, and generating a certain level of accompanying violence”.
The GFI report examined the prevalence and dynamics of financial crime, analyzing the actors and facilitators involved, the contact methods used by perpetrators and the channels used to move the associated proceeds.
He also evaluated current policies and law enforcement responses. In addition, the report provided five country case studies, examining country contexts in Antigua and Barbuda, Barbados, Belize, Jamaica and Trinidad and Tobago.
“Fraud, like other crimes, is a constantly evolving phenomenon that reacts to local, regional and international developments,” said GFI President and Chief Executive Officer 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,” he added.
According to the report, the most common types of fraud in the Caribbean include advance fee scams, especially lottery/prize scams, online shopping scams and romance scams, 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 scammer 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 “, says the report.
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 action. Preventing and investigating fraud 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, note that “in Jamaica alone, experts estimated the annual value of fraud income to be up to US$800 million”.
