Financial Crime World

Financial Crimes on the Rise in Jamaica, Report Says

A recent report by Global Financial Integrity (GFI) has revealed a significant surge in financial crimes in Jamaica, with estimated annual fraud proceeds reaching as high as JMD $123 billion.

Prevalence of Fraud Schemes

The study found that fraud schemes involving hundreds of millions, if not billions, of dollars in illicit proceeds each year are becoming increasingly common. According to GFI President and CEO Tom Cardamone, “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.”

Types of Fraud

The report identified several types of fraud as being particularly common in the Caribbean:

  • Advance Fee Scams: These include lottery and prize scams, online shopping scams, romance scams, pyramid schemes, and Ponzi schemes.
    • Pyramid schemes were found to frequently take advantage of citizens’ comfort with “sou-sous”, a legitimate informal community savings practice.

Methods of Contact

The method of contact between victims and fraudsters was often dependent on the type of fraud being committed, the sophistication of the scheme, and the type of victims involved. For example:

  • Lottery Scams: These were largely phone-based.
  • Romance Scams: These were perpetrated online and through social media.

Channels Used to Move Fraud Proceeds

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

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

Challenges in Enforcement

Despite having laws in place to cover the types of fraud discussed in the report, Caribbean countries, including Jamaica, face challenges when translating these laws into effective enforcement actions. The prevention and investigation of fraud in the region also faces cultural barriers, as some citizens may incorrectly perceive government efforts to combat fraud as an attempt to prevent them from making money.

Estimated Annual Value of Fraud Proceeds in Jamaica

In Jamaica alone, experts assessed the annual value of fraud proceeds at up to JMD $800 million.