BEWARE: Scams from Area Code 876

The Gleaner - Slippery slope

The Gleaner - Slippery slope

Published: Thursday | November 8, 2012

Lottery scam undermines financial sector

Nedburn Thaffe, Gleaner Writer
Local and international stakeholders working to put a dent in the illegal lottery scam operation yesterday painted a dismal picture of the country's future if more is not done to contain the problem.

Already some financial institutions are complaining that they are buckling under the effects of the multibillion-dollar operation and the Jamaica Bankers' Association (JBA) is warning that the nation's financial sector is now trudging on a slippery slope.

Addressing a Jamaica National Building Society (JNBS) lottery scam forum at the Terra Nova All Suite Hotel in St Andrew yesterday, member of the JBA anti-fraud committee, Leighton Mitchell, said a number of banks in Jamaica currently have on their books numerous "high-risk companies" as categorised by the Proceeds of Crime Act.

Mitchell said this was particularly so because it was easy for players in the lottery scam operation to use these companies to wash their money gained through the illicit activity.

According to him, where local banks are cited by international banks for having an indirect hand in the scam because of these high-risk companies, the result could be catastrophic.

"If banks are not able to do international transactions, it could have serious implication for not only the financial sector but also for businesses and the Government as well.

"Companies such as cambios, remittance services, boat and car dealers, casinos, hotel and tourism-related firms, real estate agencies are usually good revenue earners for the banks, but such companies are also highly exposed in the lottery scamming," Mitchell said.

In the same breath, president of Jamaica Money Remitters Association (JMRA), Leesa Kow, said because of the scam several remittance agencies now have to fork out thousands of dollars to implement strict measures to detect fraudsters. This, she said, is adversely impacting the customer base.

legislative amendments
Adding that remittance agencies are the main channel for foreign exchange, she said if these companies were to close down their operations, countless Jamaicans would stand to suffer. As a result, the JMRA president is calling for legislative amendments to be fast-tracked to prevent the worst.

"The JMRA believes the lottery scam, given its size and impact, should be entered into law as a crime. But beyond legislation, we would like to emphasise the need for an integrated identification verification system covering all major IDs such as driver's licence, passport, national IDs and TRN (taxpayers registration number)," she said, while adding that JMRA members are facing problems cross-referencing different identifications which make detecting fraudsters difficult.

Major King, who sits in the York County Sheriff's office in Maine, United States, while adding that law-enforcement agencies in Jamaica are "trying" to stem the problem, said much more needs to be done both from the local and international standpoint.

"I think the problem is growing. In 2009, there was US$30 million estimated (in the scam); now in 2012, it's US$300 million. I think that we need more collaboration. The problem is growing," King said.

In the meantime, National Security Minister Peter Bunting, who was also present at the forum, said since the implementation of the Anti-Lottery Scam Task Force in January, the police have carried out 31 major operations with 368 arrests being made. However, of that number, 85 persons have been charged with only 21 of them charged directly for lottery, scamming activities.

"In the course of that, we have also seized 118 vehicles and we are in the process of forfeiting most of these vehicles as well as J$29.6 million equivalent of cash in various currencies," Bunting said.

BEWARE: Scams from Area Code 876

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