CARIBBEAN BANKS TAKE ON FINANCIAL CRIME IN ANTIGUA AND BARBUDA, REGION WIDE
Financial Crimes on the Rise in the Caribbean
By Channing Mavrellis, December 14, 2022
The Caribbean region has been grappling with a rise in financial crimes, including advance fee frauds, pyramid and Ponzi schemes. These scams have resulted in hundreds of millions if not billions of dollars in illicit proceeds each year, threatening economic security and generating associated violence.
Prevalence and Dynamics of Financial Crime
A new report by Global Financial Integrity examines the prevalence and dynamics of financial crime in the Caribbean, focusing on advance fee frauds, pyramid and Ponzi schemes. The report analyzes actors and facilitators involved, methods used to contact victims, and channels for moving proceeds.
- Country Case Studies: The report includes country case studies from Antigua and Barbuda, Barbados, Belize, Jamaica, and Trinidad and Tobago.
- Policy and Law Enforcement Responses: Experts assess policy and law enforcement responses to financial crimes in the Caribbean region.
Common Fraud Types
Experts say the most common fraud types in the Caribbean include:
- Lottery/Prize Scams
- Online Shopping Scams
- Romance Scams
- Pyramid Schemes
- Ponzi Schemes
Methods and Channels Used by Frauds
Contact methods vary by scheme type and sophistication, with lottery scams typically phone-based and romance scams perpetrated online through social media. Proceeds are primarily moved via:
- Cash Smuggling
- Money Service Businesses
- Bank Transfers
- Trade-Based Money Laundering
- Online Platforms
Challenges in Enforcing Laws
Caribbean countries have laws to cover the discussed fraud types, but many face challenges enforcing them effectively. Prevention and investigation efforts are hindered by cultural barriers, such as citizens perceiving anti-fraud efforts as attempts to prevent them from making money or being hesitant to report victimization due to stigma.
Recommendations for Improvement
The report recommends that:
- Public and private sectors assess awareness campaigns’ effectiveness and make it easy for potential investors to verify registered individuals and companies.
- Prosecutors explore using tax legislation when civil asset forfeiture is not available.
- Policymakers evaluate consumer protection legislation for improvements.
- Countries create courts dedicated to financial crime cases.
Part of a Larger Project
As part of a larger project analyzing financial crimes in Latin America and the Caribbean, this report is part of a four-section initiative to understand hemisphere-wide threats. Other reports have examined illicit proceeds from corruption, drug trafficking, mineral trafficking, trafficking in persons, and smuggling of migrants.