Trade-based money laundering (TBML) is one of the primary channels used to move the proceeds of fraud perpetrated in the Caribbean, according to a new report by Global Financial Integrity (GFI), the Washington based non-profit focused on illicit financial flows.

Financial fraud has a widespread footprint across the region, involving hundreds of millions if not billions of dollars in illicit proceeds each year, according to the report, Financial Fraud in the Caribbean.

Other channels used to move the proceeds of fraud in the region include cash smuggling, money service businesses, bank transfers, and online money transfer platforms, according to interviews with subject matter experts.

Expert input
The report draws on interviews with subject matter experts from law enforcement, financial intelligence units, financial services commissions, multilateral organisations, the private sector and the media.

Experts specifically mentioned TBML, particularly the black market peso exchange, as a method for moving funds related to lottery scamming.

Lottery scam

In a lottery scam, the scammer poses as a trusted individual or entity such as a government agency, well-known organisation or individual, and notifies the victim that they have won money or a prize.

The victim is then told to pay a certain amount of money to cover taxes and fees before they receiving their winnings, but after the victim remits payment they neither hear from the scammer nor do they receive their winnings.

Global Financial Integrity’s report, Financial Fraud in the Caribbean, can be found here.

Categories: Trade Based Financial crimes News

Tags: Caribbean, Fraud, GFI, report, TBML