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FINANCIAL SCAMS, FRAUD AND
MONEY LAUNDERING: COULD YOU BE AT RISK?
Financial Services Commission (FSC) PUBLIC FORUM
PRESENTER: JUSTIN FELICE CHIEF TECHNICAL DIRECTOR
Financial Investigations Division
"Following the Money"
FRAUD ENVIRONMENT – GLOBAL PERSPECTIVE RECESSION
CUT BACKS, REDUCED SPENDING etc. HAS CREATED THE OPPORTUNITY FOR INCREASED INCIDENCE OF FRAUD
ECONOMIC UNCERTAINTY CASH AND CREDIT
CRUNCH SINKING WORKFORCE
MORALE.
"Following the Money"
FRAUD ENVIRONMENT – GLOBAL PERSPECTIVE GLOBALIZATION
CHANGE IN BUSINESS PRACTICES (INTERNET BANKING, ON-LINE TRADING)
PEOPLE’S GREED PRESSURE TO
MAINTAIN/SUSTAIN ONE’S LIFESTYLE
OPPORTUNITY TO CAPITALIZE ON BUSINESS VULNERABILITY
"Following the Money"
Lottery Scams Cash for Gold
Scams Credit/Debit
Card Scams Identity Theft Ponzi Schemes Pyramid Scams Investment
Scams
MAIN TYPES OF SCAMS
"Following the Money"
INCREASED INCIDENCE IN FRAUD - PERCENTAGE OF COMPANIES AFFECTED *ANNUAL GLOBAL FRAUD SURVEY (2011/12)
0
5
10
15
20
25
30
Theft ofPhysicalAssets
InformationTheft
Corruption
2011 25 23 192010 27 27 10
20112010
PHYSICAL ASSET THEFT – *HIGHEST INCIDENCE
CORRUPTION – *HIGHEST INCREASE. ALTHOUGH THEFT OF INFORMATION AND PHYSICAL ASSETS HAVE FALLEN BY 2-4%
"Following the Money"
ANALYSIS – Internal Controls /Security RECORD KEEPING SUSPICIOUS
TRANSACTIONS REPORTING
AUDIT TRAILS INTERNAL SECURITY AML/CFT STANDARDS,
POLICIES
"Following the Money"
ANALYSIS - Changes In Business Operations SPIKE IN CREDIT AND DEBIT CARD FRAUD BETWEEN JAN 2010 AND SEP 2011 LOSSES IN “CARD-NOT-PRESENT” FRAUD WAS TWO TIMES (2X) GREATER THAN LOSSES IN COUNTERFEIT CARD. WITH INCREASED DEMAND FOR DEBIT CARDS, SCAM TECHNIQUES LIKE SKIMMING HAVE ALSO BEEN ON THE INCREASE
SKIMMING
"Following the Money"
ANALYSIS - Example Of Impact LOTTERY SCAM COMPLAINTS FROM US
CITIZENS ABOUT JAMAICAN LOTTERY SCAM: 30,000 COMPLAINTS
WERE REPORTED IN 2011 UP FROM 1,867 IN 2007.
MOST INCIDENTS GO
UNREPORTED DUE TO FEAR OR EMBARRASSMENT (Source - the U.S. Federal Trade Commission)
"Following the Money"
FID/ARA LOTTO SCAM CASE (Mother and Son) View of Assets in Case TO DATE, JA$3.2M
FORFEITED TO ARA (ASSET RECOVERY AGENCY) FROM THIS CASE.
THIS AMOUNT REPRESENTS PROCEEDS FROM A LOTTO SCAM.
FUNDS USED TO ACQUIRE ASSETS e.g. A CAR WHICH WAS REGISTERED IN THE ACCUSED RELATIVE’S NAME (NOW DECEASED)
CIVIL FORFEITURE PROCEEDINGS STILL IN PROGRESS "Following the Money"
RESPONSE - Minimising The Risk COLLABORATIVE WORKING
RELATIONSHIP WITH OTHER KEY PARTNERS i.e. JCF, CUSTOMS, FSC etc.
REVISION OF AML/CFT REGIME
ENHANCE CAPACITY OF Financial Intelligence Unit (re: EXCHANGE OF INFORMATION)
GOVERNMENT – PRIVATE SECTOR SUPPORT TO MINIMIZE ML/TF RISKS
LEGISLATION – NEW LOTTO SCAM LAW BY 2013
"Following the Money"
ASSESSMENT
CFATF/FATF RISK MANAGEMENT MEASURES SIMPLIFIED CUSTOMER DUE
DILIGENCE WORLDWIDE SECURITY TEAMS SUSPICIOUS ACTIVITY
DETECTOR SOFTWARE RISK BASED VERIFICATION OF
INFORMATION namely CREDIT CARD ADDRESS VERIFICATION
"Following the Money"
ASSESSMENT – Trust and Greed are your Biggest Weaknesses What to Look Out for
in a Lottery: Lotteries do not
require you to pay a fee or tax to collect winnings.
Never send money to anybody you don’t know and trust.
"Following the Money"
ASSESSMENT – Trust and Greed are your Biggest Weaknesses Protect your Identity Be Cautious and
Prudent with Money Matters
Face -to -Face Approach to Verify/Check
Be Careful Conducting Business via Internet/Telephone
"Following the Money"
"Following the Money"
FINANCIAL SCAMS, FRAUD AND
MONEY LAUNDERING: COULD YOU BE AT RISK?
WHAT’S
YOUR VIEW?
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