Recent Trends in Financial Crimes & the Implications of the New Proceeds of Crime Act 2018

(P.O.C.A.) on Policing the Financial Services Sector

Presented by:

D/Cpl. 3317 Jared Turnquest

Financial Crimes Unit

Royal Bahamas Police Force

The Financial Crime Unit was formed in early 2018 and was officially

operational in August 2018 as a result of the amalgamation of the

Tracing and Forfeiture Section of the Drug Enforcement Unit, the

Commercial Crime/Business and Technology Crimes Unit of the Central

Detective Unit, and the Anti-Corruption Unit.

The idea behind the forming of the Unit was to co-ordinate all

investigations involving business/financial/government investigations

which oftentimes tended to merge with each other. With the formation

of the new unit, investigations have now become more streamlined and

efficient with the relevant sections all under one roof to pool resources,

information, and expertise.

Types of investigations conducted by the Financial Crime include:

• -Fraud by False Pretenses

• -Employee theft

• -Service Theft

• -Counterfeit Currency

• -Failing to Declare Currency (U.S.)

• -Attempted exportation (Non U.S. destinations)

• -Forgery

• -Forged documents

• -Bigamy

• -Cash Seizures

• -Bank Fraud (On-line banking/cheque fraud)

• -Internet/Social Media scams

• -Classified Ads scams

• -Investment Schemes

• -Misappropriation of Government funds

• -Money Laundering

What all of the above mentioned matters have in common is: EASY

MONEY CAN BE MADE IN IT!!

As STEP professionals committed to ensuring the safety and

security of your clients’ business/personal affairs, it is important to

be aware of fraud trends that can have far reaching negative

effects on your clients and your ability to protect them.

Oftentimes, persons with wealth are targeted for obvious reasons

and the methods used to defraud them have changed dramatically

over the years. With the popularity and prevalence of social media

as the main source of communication nowadays, it should come as

no surprise that fraud trends have adapted to incorporate social

media.

It is my intention to highlight a few of the most recent

popular fraud trends that have the most relevance to

STEP and their clients. They are:

-Bank Fraud (On-line banking)

-Forged Documents

-Internet/Social Media Parliamentarian Scams

On-Line Banking scams

For the past year, the Financial Crime Unit has been inundated

with on-line banking fraud which has left many banking clients as

victims suffering huge financial losses. The banks have had to

absorb many of the losses as well.

Victims’ bank accounts are being compromised as a result of

‘Call Center’ representatives, Phishing E-mails and recruiters

offering instant cash deposits. Once the accounts are compromised,

culprits are able to clean out the client’s accounts and/or deny the

client’s access to their accounts.

Call Center Representative

Scam Particulars:

The bank client(victim) receives a call from a person purporting to be a

representative of the bank (Credit card center, customer service center) and

is informed that a routine verification exercise is being conducted. The client

(victim) is either asked their personal information(date of birth/address/

occupation etc.), or asked to verify their on-line password/ATM pin.

Once that is done, the culprit immediately uses that information to access

the victim’s bank account. The client now cannot access their account and

when they finally do access the account they realize that the account is now

depleted.

Phishing E-mails

Phishing Scam is a fraudster’s illegal attempt to acquire sensitive information (username,

passwords, etc.) by pretending to be a company/bank communicating electronically, usually

for malicious reasons.

In the Bahamas, we have received reports where bank customers were sent emails advising

them to update their account information. Customers would place their information in the

fields and the information is captured.

Sample of email sent to customers:

Sample of E-mail sent to customers

Bank customer (victim) receives an e-mail from the bank instructing them

to log on to a portal for them to continue using on-line banking.

When the victim logs on, the screen is blank. (Mal-ware/Spyware installed).

The bank client(victim) receives an e-mail notification of some

(unusual) activity regarding the account and would request some

sort of verification. When the bank client (victim) reaches out to

the bank, it’s at this time that they are informed that their account

has been compromised

At first glance, the victim did not realize

the e-mail address

Very often there are spelling errors in the

message. (Origin of the e-mails are usually

from Non-English speaking Countries).

Internet Parliamentarian Scam

Scam Particulars:

The victim is messaged via Facebook/WhatsApp by a person purporting to be aGovernment Minister/Prominent figure. A photo of the mentioned Minister/

Prominent figure is used as the profile handle.

The victim is informed of a program/grant offered by the U.N. (United Nations) that will provide funding to persons who apply and pay a registration fee. (Fee ranges from $100-$1000)

The victim is then instructed to quickly wire the funds via Western Union/money gram to a person (private citizen) somewhere in the United States/foreignjurisdiction for the application to be processed.

When the funds are wired, the culprit (posing as the Minister/Prominent figure) will sometimes try to obtain additional funds under the guise of extra fees. If the victim refuses or asks questions, communication is abruptly severed.

As soon as the funds are wired, it’s usually immediately withdrawn. In many instances, fake ID’s were used to obtain the funds at Western Union/Moneygram.

Tips:

• Banks will never ask you for your personal information over the

the phone or internet. If in doubt, call the bank personally or

visit the bank to verify.

• Be vigilant when opening/responding to E-Mails. Be cautious of

of attachments to e-mails with high risk formats (EXE/MSI)

• Make passwords hard to figure out (age/DOB/ middle name/pet’s

name, nickname are commonly used passwords.)

Tips:

• A Minister will never solicit money from a private individual on behalf of

another (foreign) entity.

• Grants offered by organizations would be posted on mass media

(Newspapers/T.V./magazines etc.). The specifics of the ‘grant’ should be

outlined. Ask for the write-ups.

• Registration/processing fees wouldn’t be sent via Western Union/money

transfer to an individual.

Forged Documents

Law enforcement has seen an increase in the usage of forged documents in

recent time. This is due to the technology now available to create these documents

and the relatively inexpensive cost of the equipment and hardware.

Culprits are benefitting from the use of forged documents in order to obtain

Jobs, Loans, Licenses, and any other monetary or valuable advantage.

Their success relies heavily on the vigilance (or lack thereof) of the

receiving parties or entities. Taking the extra steps to verify validity and

authenticity can save time and money. (Prevention vs. Cure)

Typical Fraudster’s

Home Office

Skimmed Credit Cards

Forged document

Implications of the Proceeds of Crime Act (P.O.C.A.) 2018

On Policing the Financial Services Center.

The introduction of the new Proceeds of Crime Act 2018 (P.O.C.A.) and

the existing Financial Intelligence Act has given law enforcement added

powers in investigating financial matters. Previously, the extent of law

enforcement’s ability to investigate financial matters were limited in its

scope resulting in many fraudsters and money launderers escaping the

reach of the law. Predicate offenses were needed in order to charge

persons with money laundering and crime proceeds charges, however

now those charges can be proffered as stand alone charges.

Section 8 of the Proceeds of Crime Act 2018:

For the purpose of this part-

(a) no conviction for an offense shall be necessary to prove that the property

is directly of indirectly the proceeds of crime, nor shall it be necessary to

prove that a specific offence has been committed by any person.

(b) knowledge, suspicion, or intent or purpose may be inferred from objective

factual circumstances.

What Are The Benefits Of Money Laundering Laws?

• Money Laundering is a separate offense which carries additional jail

time. Allows for seizure and confiscation of proceeds of crime.

• Allows law enforcement access to bank and other financial institution

records.

• Requires financial institutions to file suspicious and sometimes cash

transaction reports, and to identify the beneficial owners of legal entities.

• Requires establishment of Financial Intelligence Units which receive

reports from financial institutions and can provide new channels for

international exchange of information.

Money laundering offences

There are five basic money laundering offences.

Concealing, transferring or dealing with the proceeds of criminal conduct

(Section 9 (1) (a thru e), 2 (a) (b) )

Assisting another to conceal proceeds of criminal conduct. (Section 10)

Acquisition, possession or use of proceeds of criminal conduct. (Section 11

(1) (a)(b)(c) , (2) (a)(b)(c)

Disclosure of knowledge or suspicion of money laundering. (Section 13 (1)

(a) (b) (c) )

Tipping off (Section 14 (a) (b) )

TYPES OF INVESTIGATIONS

• Proactive- These will be as a result of disclosures made by banks and financial institutions.

• Reactive- This is a result of the arrest of criminals who having been charged for a predicate offence and appears to have derived substantial rewards as the result of drug trafficking or other criminal activity.

How/Why is this important to STEP???

• Is a global threat;

• Is fuel to expand criminal enterprise;

• Helps hide corrupt payments;

• Uneven playing field for honest business;

• Risks for financial systems & institutions-erodes integrity Regulatory

– Reputational, credit and operational risk.

– Market risk.

• Economic:

– Deters private investment

– Destroys competition

– Revenue impact

• Financial:

– Perpetuates corruption, obstructs good governance

– Erodes confidence

– Destabilizes financial institutions

Money Laundering Investigations

Thank You!

Questions and

Comments

Financial Crime Unit

Neville Bethel Sr. Building

Nassau St.

356-6019/3566025