Financial Crimes Surge in the Caribbean: Antigua and Barbuda Among Those Affected

A new report by Global Financial Integrity (GFI) has shed light on the growing threat of financial crimes in the Caribbean region. The report, titled “Financial Fraud in the Caribbean,” highlights the widespread prevalence of fraud schemes across the region, with Antigua and Barbuda among the countries affected.

Types of Frauds

The most common types of fraud in the Caribbean include:

• Advance fee frauds
• Pyramid and Ponzi schemes
• Online shopping scams
• Romance scams

In Antigua and Barbuda, pyramid schemes have been known to take advantage of citizens’ familiarity with “sou-sous,” a legitimate community savings practice.

Methods Used by Fraudsters

The methods used by fraudsters vary depending on the type of scheme and the sophistication of the operation. For example:

• Lottery scams are often carried out over the phone
• Romance scams are perpetrated online and through social media

Moving Illicit Proceeds

In terms of moving illicit proceeds, cash smuggling, money service businesses, bank transfers, trade-based money laundering, and online money transfer platforms are the primary channels used by fraudsters.

Challenges in Prevention and Investigation

Caribbean countries have laws in place to cover these types of fraud, but many face challenges when translating these laws into effective enforcement actions. The prevention and investigation of fraud in the region also faces cultural barriers. Some citizens may be hesitant to report fraud victimization due to cultural stigma, while others may incorrectly perceive government efforts to combat fraud as an attempt to prevent them from making money.

Impact on Jamaica

In Jamaica alone, experts estimate that the annual value of fraud proceeds could reach up to US$800 million.

Recommendations

The report makes several recommendations for both the public and private sectors, including:

• Assessing the effectiveness of awareness campaigns
• Improving consumer protection legislation
• Creating specialized courts to handle financial crime cases
• Encouraging the private sector to take steps to assess and mitigate risk in a nuanced, evidence-based manner

Conclusion

The report is part of a larger project by GFI that aims to analyze financial crimes in Latin America and the Caribbean. The project’s first report covered financial crime trends throughout the hemisphere, while this report provides a more detailed look at fraud schemes in the Caribbean region.