Jamaica Sees Rise in Financial Fraud, Report Says
By Channing Mavrellis, December 14, 2022
A new report by Global Financial Integrity has shed light on the widespread problem of financial fraud in Jamaica and across the Caribbean region. The report, titled “Financial Fraud in the Caribbean”, reveals that the region is plagued by hundreds of millions, if not billions, of dollars in illicit proceeds each year.
Common Types of Financial Fraud
The report highlights the most common types of financial fraud in the region, including:
- Advance fee frauds
- Pyramid schemes
- Ponzi schemes
In Jamaica alone, experts estimate that the annual value of fraud proceeds could reach up to US$800 million.
Methods Used by Perpetrators
According to the report, the methods used by perpetrators vary depending on the type of fraud being committed. For example:
- Lottery scams are often phone-based
- Romance scams are perpetrated online and through social media
The primary channels used to move the proceeds of fraud include:
- 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 these types of fraud, many Caribbean countries face challenges when translating these laws into effective enforcement actions. Additionally, cultural barriers pose a significant challenge to the prevention and investigation of fraud in the region. Some citizens may incorrectly perceive governments’ efforts to combat fraud as an attempt to prevent them from making money, while others may be hesitant to report fraud victimization due to cultural stigma.
Recommendations
The report makes several recommendations for the public and private sectors to combat financial fraud in Jamaica and across the Caribbean, including:
- Improving awareness campaigns
- Making it easier for potential investors to verify individuals and companies registered to conduct business in a jurisdiction
- Using tax legislation when civil asset forfeiture is not available
- Evaluating consumer protection legislation
- Creating specialized courts to handle financial crime cases
Project Overview
The report is part of a larger project by GFI that analyzes 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 deeper dive into the specific challenges facing the Caribbean region.