Financial Crime World

Financial Crime Case Studies: Jamaica in Focus as Region Grapples with Uptick in Fraud Schemes

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A recent report by Global Financial Integrity (GFI) has shed light on the growing prevalence of financial crimes in the Caribbean, including fraud schemes that have a widespread footprint across the region. The report, titled “Financial Fraud in the Caribbean,” examines the dynamics of financial crime in five countries - Antigua and Barbuda, Barbados, Belize, Jamaica, and Trinidad and Tobago.

Key Findings

  • Financial fraud has a significant impact on the economic security of countries and generates associated violence.
  • Pyramid schemes are particularly prevalent in the region, often exploiting citizens’ familiarity with “sou-ous,” a legitimate community savings practice.
  • The method of contact between victim and fraudster can vary depending on the type of fraud, sophistication of the scheme, and type of victims involved.

Channels Used to Move Proceeds

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

Jamaica: A Hub for Financial Fraud

  • Experts estimate that up to $800 million in illicit proceeds flows through Jamaica annually.
  • The country is affected by financial fraud, with many schemes exploiting its citizens’ trust.

Challenges in Enforcing Laws

  • Cultural barriers hinder prevention and investigation efforts, as some citizens may perceive governments’ anti-fraud measures as an attempt to prevent them from making money or are hesitant to report victimization due to cultural stigma.
  • Despite having laws in place to cover various types of fraud, Caribbean countries face challenges in translating these laws into effective enforcement actions.

Recommendations

Public Sector

  • Assess and improve awareness campaigns
  • Verify individuals and companies registered to conduct business in a jurisdiction

Private Sector

  • Explore tax legislation for civil asset forfeiture
  • Evaluate consumer protection legislation
  • Create specialized courts for financial crime cases
  • Take steps to mitigate risk in a nuanced, evidence-based manner

Conclusion

GFI President and CEO Tom Cardamone emphasized the importance of addressing financial fraud, saying that “fraud, like other crimes, is a continuously evolving phenomenon that reacts to local, regional, and international developments. The public and private sectors, as well as the region’s citizens, must be alert and responsive to the dynamics of long-standing and nascent fraud schemes.”