According to the US-based Global Financial Integrity (GFI), financial crimes, including fraud schemes, have increased across the Caribbean in recent years.
The Washington-based think tank said in its most recent report, “Financial Fraud in the Caribbean,” which was published on Wednesday, that financial fraud has a significant effect on the Caribbean as a whole, involves potentially billions of dollars in illicit proceeds each year, affects the economic security of nations and the region as a whole, and leads to “a certain level of associated violence.”
- Advertisement -
In addition to examining the players and facilitators engaged, the perpetrators’ methods of contact, and the routes utilized to shift the related revenues, the GFI analysis also looked at the prevalence and dynamics of financial crime. It evaluated existing legal and policy measures as well.
Five nations, Antigua and Barbuda, Barbados, Belize, Jamaica, and Trinidad and Tobago, were used as case studies in the report to evaluate these circumstances.
GFI’s president and chief executive officer, Tom Cardamone stated, “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,” he added.
The research claims that advance fee frauds, notably lottery/prize scams, internet shopping scams, romance scams, as well as a pyramid and Ponzi schemes, are the most prevalent fraud categories in the Caribbean.
It claimed that local residents’ comfort and familiarity with “sou-sous” or “partner,” a genuine, informal communal savings practice, is regularly used by pyramid scams in the area.
Cardamone claimed that “the method of contact between victim and fraudster is oftentimes dependent on the type of fraud being committed, the sophistication of the schemes, and the type of victims involved. For example, lottery scams are largely phone-based while romance scams are perpetrated online and through social media.”
According to interviews with subject matter experts, the GFI believes that cash smuggling, money service firms, bank transfers, trade-based money laundering, and online money transfer platforms are the main methods utilized to transport the profits of fraud.
“Caribbean countries have laws in place to cover the types of fraud discussed in this report, however many countries face challenges when translating these laws into effective enforcement actions. The prevention and investigation of fraud in the region face cultural barriers,” the GFI president noted.
“Some citizens may incorrectly perceive the government’s efforts to combat fraud as an attempt to prevent them from making money. Others may be hesitant to report fraud victimization due to cultural stigma,” the report noted, noting that “in Jamaica alone, experts assessed the annual value of fraud proceeds at up to US$800 million.”
