Financial Crime World

Puerto Rico’s Financial Crime Prevention Strategies in the Spotlight

As Puerto Rico continues to recover from the devastating effects of Hurricane Maria and a decade-long economic crisis, it has also become a hotbed for financial crimes, with money laundering being a major concern.

The Challenge of Money Laundering in Puerto Rico

Puerto Rico’s complex financial system and unique economic situation make it an attractive destination for criminals seeking to conceal the proceeds of illegal activities. One of the primary contributors to Puerto Rico’s money laundering problem is drug trafficking, which has become a significant source of illegal funds in the region.

The Risks Posed by Non-Federally Chartered Financial Entities

A recent National Money Laundering Risk Assessment found that non-federally chartered Puerto Rican financial entities (ICEs and IBEs) pose a significant risk due to their offshore banking model, leaving them vulnerable to misuse by criminals seeking to launder money.

The Rise of Cryptocurrencies: New Opportunities for Money Launderers

The rise of cryptocurrencies has created new opportunities for money launderers, cybercriminals, and other bad actors. With the growth of Bitcoin ATMs in Puerto Rico, expanding access to cryptocurrencies and their potential use in money laundering activities is a major concern.

Sophisticated Methods Used by Criminals

Money mules are individuals who transfer illegally acquired funds on behalf of or at the direction of another. Vulnerable individuals include college students, small business owners, elderly individuals, and newcomers to the country.

  • Techniques used by criminals include:
    • Over and under invoicing
    • Multiple invoicing
    • Falsely described goods and services

The Importance of Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Measures

Despite the risks associated with cryptocurrencies, businesses in Puerto Rico have begun to accept them as a form of payment. It is crucial for financial institutions to implement robust AML and CFT measures to prevent abuse.

Reporting Suspicious Activity

The FBI’s Money Laundering Squad is working to combat these threats by providing information and resources to the public on how to identify and report suspicious activity.