Financial Crime World

Financial Crimes on the Rise in Cayman Islands Banking Industry

The Cayman Islands have been experiencing a significant surge in financial crimes, including money laundering, terrorist financing, and fraud. The Financial Crime Investigation Unit (FCIU) has been at the forefront of combating these crimes, working closely with international law enforcement agencies and local authorities to disrupt and dismantle organized crime networks.

Investigations and Arrests

In 2016 and 2017, the FCIU investigated a total of 93 financial crime cases, resulting in:

  • Cash seizures: CI$160,000 (approximately $190,000 USD) and US$25,400
  • Asset restraints: CI$138,000, including eight vehicles, one motor boat, two houses, and cash deposits

Notable Court Convictions

Several individuals have been convicted of financial crimes in recent court cases:

  • 14-year sentence for a man who defrauded dozens of immigration applicants
  • 8-year sentence for another man who stole CI$500,000 from the University College of the Cayman Islands
  • 20-month sentence for a Bulgarian national found in possession of 62 cloned bank cards

Online Scams on the Rise

The FCIU has been dealing with an increase in online scams, which often use:

  • Phishing emails to obtain funds by deception and personal information
  • Fake job advertisements to deceive individuals into sending money or providing sensitive information

Money Laundering and Terrorist Financing

Combatting money laundering and terrorist financing is a priority for the FCIU, which has established a new Proactive Task Force for International Money Laundering and Terrorist Financing. This task force assists overseas law enforcement agencies with requests for information through mutual legal assistance treaties (MLATs) and international letters of request.

Public-Private Partnership

The FCIU works closely with the Cayman Islands’ financial sector to share intelligence and best practices in combating financial crimes. The Stakeholders Forum, established by the FCIU in 2017, brings together compliance officers from Class A Banks and Money Services Bureaus to discuss financial crime risks and incidents.

The COVID-19 pandemic has presented new challenges for law enforcement activity and economic disruption, leading to a surge in novel fraud, money laundering, and terrorist financing threats. The FCIU has reported an increase in fraud and cybercrime cases related to the pandemic, and is working closely with international agencies to combat these crimes.

National AML/CFT Structure

The Cayman Islands have a robust national anti-money laundering and combating the financing of terrorism (AML/CFT) structure in place, which includes:

  • The Financial Crimes Investigation Unit
  • The Anti-Money Laundering Unit
  • The Financial Services Commission