Financial Crime Prevention: A Growing Concern in Jamaica

Report Reveals Estimated Annual Proceeds of Fraud Reaching $800 Million

A recent report by Global Financial Integrity (GFI) has highlighted the growing threat of financial crimes in Jamaica, with estimated annual proceeds of fraud amounting to a staggering US$800 million. This translates to approximately JMD 123 billion locally.

The Prevalence and Dynamics of Financial Crime in the Caribbean Region

The think tank’s latest study examines the prevalence and dynamics of financial crime, including fraud schemes involving hundreds of millions if not billions of dollars in illicit proceeds each year across the Caribbean region.

Types of Fraud and Scams Targeting Jamaican Citizens

According to the report, Jamaica is not immune to these crimes, with citizens falling victim to various types of fraud. The most common scams include:

• Advance fee fraud, specifically lottery and prize-related schemes
• Online shopping and romance scams
• Pyramid and Ponzi schemes

Interestingly, pyramid schemes in the region often take advantage of citizens’ familiarity with “sou- sou”, a legitimate community savings practice.

Methods of Contact and Proceeds of Fraud

The report highlights that the method of contact between victims and fraudsters varies depending on the type of scheme, its sophistication, and the type of victims involved. For example:

• Lottery scams are largely phone-based
• Romance scams are perpetrated online and through social media

The primary channels used to move the proceeds of fraud include:

• Cash smuggling
• Money service businesses
• Bank transfers
• Trade-based money laundering
• Online money transfer platforms

Challenges in Combating Fraud

However, the report notes that Caribbean countries face challenges in translating their laws into effective enforcement actions. Cultural barriers also hinder the prevention and investigation of fraud, with some citizens hesitant to report victimization due to cultural stigma or incorrect perceptions about governments’ efforts to combat fraud.

Call for Collective Action

GFI President and CEO Tom Cardamone emphasized the need for a collective response from the public and private sectors, as well as citizens, to address the evolving phenomenon of financial crime. “Fraud is a continuously evolving phenomenon that reacts to local, regional, and international developments,” he said. “We must be alert and responsive to the dynamics of long-standing and nascent fraud schemes.”