Financial Crime World

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Money Laundering in Dominican Republic: A Growing Concern

The Dominican Republic has dismantled a transnational cybercrime network believed to have defrauded hundreds of US citizens out of over $200 million. This latest example highlights the growing threat posed by financial crime operations in the Caribbean.

The Operation

In a series of raids on March 2, authorities arrested around 70 individuals who allegedly worked for the cybercrime ring in call centers across the country. The operation, known as Operation Discovery, was launched over a year ago to break up the criminal network, which allegedly used various identity theft schemes to extract money from victims.

How it Worked

  • The group used caller-ID spoofing services to fake their identities and demand extortion payments from individuals after threatening to kidnap family members.
  • In another scheme, members of the criminal network targeted people with prescriptions for highly controlled drugs and medications, then demanded payment from the patients after delivering the medicine.

Money Laundering Methods

To launder their extortion proceeds, the network allegedly used:

  • Cryptocurrencies
  • Deposits through remittance companies
  • Fraudulent money transfers The Attorney General’s Office estimated that the cybercrime network moved around $250 million.

The Broader Picture

This recent dismantling of the cybercrime network highlights two important points:

  • A continued crackdown on organized crime in the Dominican Republic
  • The rise in fraud schemes based in the Caribbean

Cybercrime has increased significantly since the start of the COVID-19 pandemic, with prosecutor Marineldy Peña Hernández stating that it has become more lucrative than drug trafficking in the country. The pandemic also saw a surge in sexual extortion, which involves victims sending compromising photos to others who then demand payment in exchange for not releasing the images publicly.

Fighting Cybercrime

The Dominican Republic has laws and regulations aimed at fighting cybercrime, including:

  • Creation of a special prosecutor’s office focused on cybercrimes like card cloning, phishing scams, and identity theft
  • Prioritization of the fight against corruption and organized crime by President Abinader since coming to power in August 2020

Regional Efforts

Across the Caribbean, there is a growing trend regarding the growth of cybercrime. Numerous Ponzi and pyramid schemes have cropped up in various countries, including:

  • Guyana
  • Trinidad and Tobago
  • Barbados
  • Antigua and Barbuda
  • Others

Some countries have passed legislation to fight against these schemes, while others are working to identify and report financial and cybercrimes.

The Caribbean Community’s Response

The Caribbean Community (Caricom) has listed cybercrime as the third-largest security concern, behind the situation in Haiti and trafficking and human smuggling. The region’s leaders must work together to combat this growing threat and protect their citizens from financial crime.