June 12, 2021

Caribbean fraud talks on next week

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By Nadaleen Singh From The Guardian T&T

Five per cent of annual revenue earned by companies internationally disappears as a result of fraud.

This comes from Jerome Chambers, director, Global Forensic Institute (GFI) in T&T, who quoted from the 2016, Ninth Report on Occupational Fraud and Abuse which was produced by the Association of Certified Fraud Examiners.

According to the report, the total loss caused by the cases examined in its ninth report, exceeded US$6.3 billion, with an average loss per case of US$2.7 million internationally.

Chambers spoke to Business Guardian ahead of the Institute’s, Caribbean Fraud conference, which is to be held on Monday and Tuesday coming.

Asked what was the rationale for choosing the theme, which is FATCA, Trafficking and Risks, Chambers said FATCA deals with compliance of the regulations in the TIEA by an individual, a business, an institution in order to continue doing business nationally and internationally.

“Human trafficking is one of the many ways of financing terrorism. It has been done for years. A lot of the terrorist groups have been guilty of trafficking people and the money they raised would be used to finance terrorism. Once it is an issue where you have proceeds of a serious crime and then you conceal the source or change from cash to something else, you have literally laundered money or attempted to launder money.”

Asked whether members of the public look at the rules in the TIEA legislation, very seriously, he said, “The technicians in the field, the professionals, yes we understand. The lay person in the street still does not get it (when it comes to fraud and the TIEA legislation).

“Unfortunately we allow too much politics to enter the discussions to enter the discussions in T&T.

FATCA was not for T&T only, it was meant for the entire world. Once you are a Foreign Financial Institution you are going to be looked at.”

Regarding individuals and their appreciation of FATCA, he praised the Bankers Association of T&T for increasing awareness of the importance of being compliant with the legislation.

Securities Fraud is another topic at the conference with Mary Gaskin, Mortgage and Securities Fraud Examiner from the Maryland Commision of Financial Regulations scheduled to speak.

Asked whether there has ever been an instance of mortgage fraud in T&T he said, there are instances where criminals have falsified the deed to lands owned by another person and when the owner dies the person sells the property.

“There was one instance locally, where a family went overseas for one month and when they came back they found somebody else in their house, the property was sold while they weren’t there.

“Sometimes it is self-inflicted, we live in a society where everybody needs to live out loud. Before we go on vacation we are telling everybody on Facebook that we are going, when we reach we are checking in, so everyone know where we are. Every monument that we pass, we take a selfie so they know we are still there, you help them decide how time they have to do what they have to do.”

Fraud according to Chambers, can occur internally and externally of the particular company.

“Employees who are inside know the system, they know the loopholes, they have friends. Very often we don’t do background checks on employees when we hire them.”

“Wherever there is a likelihood (of fraud) you are supposed to be checking, so you are not just supposed to be hiring without doing a proper background check. Those are the people being on the inside, turn out to be the enemy within, you hire them to do A-B-C but they have gone rogue.”

Singling out procurement fraud as one type of internal fraud, he said it occurs if the employee who has to deal with the supplier makes an arrangement with the vendor.

“If we (the company) have decided to take three tenders (from three different companies) then I (the rogue employee) can tell the preferred vendor what the other two tendered and how to bid, or another arrangement happens where the vendor understands that its cost plus, the plus being for the rogue employee, that vendor will always look the best, always have the best price, the best service,” he said.

Chambers said by the time a fraud transaction has been detected, it already has been going on for at least 18 months. The issue of internal fraud by employees is expected to be one of the topics at the conference, where Jennifer Koo-Rogers from the Inter bank anti-fraud committee of the Bankers Association of T&T would speak on.

Referring to how technology can be linked to fraud he said, “technology allows for a mask, I could be anybody behind my device, I could say that I am the sexiest woman alive with a Coca-Cola shape, I can say that I am an investment banker. You are on the other end, whatever profile I create you are inclined to believe it.”

“Even if you tell yourself I would nver get caught in that everybody tends to want something for nothing, so you get pulled into it. Secondly, the speed at which money can be moved its gone before you know it. Although technology is meant to bring us closer together there are times when it seems to separate us,” he said.

For more on this story go to: http://www.guardian.co.tt/business/2017-05-31/caribbean-fraud-talks-next-week

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