Mon­ey-laun­der­ing is a very re­al and se­ri­ous prob­lem fac­ing T&T, says promi­nent at­tor­ney Ravi Ra­j­coomar, who re­cent­ly pub­lished a book on the mat­ter. He, how­ev­er, is con­fi­dent that the Gov­ern­ment is tak­ing this scourge se­ri­ous­ly and is in the process of beef­ing up the pro­cure­ment leg­is­la­tion. A mem­ber of the board of the Se­cu­ri­ties Com­mis­sion, Ra­j­coomar said sting op­er­a­tions can be mount­ed to nab mon­ey laun­der­ers.

Q: Mr Ra­j­coomar, why should the av­er­age Trin­bag­on­ian be con­cerned about mon­ey-laun­der­ing?

A: (In his Ed­ward Street, Port-of-Spain, cham­bers Thurs­day morn­ing) Well, for two rea­sons: the main be­ing that it al­so af­fects gov­ern­ment pro­cure­ment is­sues and the av­er­age cit­i­zen is a tax­pay­er, and tax­pay­ers' mon­ey is what is used in pro­cure­ment.

So if you have a mon­ey-laun­der­ing sys­tem to at­tack the cor­rup­tion in procur­ing-if it ex­ists, and I want to be gen­er­ous here-it would mean those who prof­it from cor­rup­tion and fraud would lose the prof­it and it would take the edge out of be­ing cor­rupt.

Un­der what leg­is­la­tion is mon­ey-laun­der­ing be­ing fought?

The Mon­ey Laun­der­ing Act ap­plies to in­dictable of­fences as are fraud cas­es. Of course, the lim­i­ta­tion on that is that the Mon­ey Laun­der­ing Act is 2010, the Lar­ce­ny Act is 1900 and the Mis­be­hav­iour in Pub­lic Of­fice is 1600. When these of­fences were cre­at­ed no­body would have had a clue of ei­ther cor­po­rate li­a­bil­i­ty or pro­cure­ment prac­tices.

When you say 1600, do you mean that was the year the leg­is­la­tion was en­act­ed?

Yes. And we need to bring the law in­to line with the 21st cen­tu­ry. For ex­am­ple, in Lon­don the 1909 Cor­rup­tion Act which we op­er­ate un­der was amend­ed and you have the 2010 Bribery Act, which takes in­to ac­count mod­ern trends.

This pro­cure­ment is­sue has been a sore one over the years and the PP Gov­ern­ment has promised to beef up this leg­is­la­tion. Do you know how far this has reached?

Last week I at­tend­ed a pro­cure­ment con­fer­ence staged by the Pro­cure­ment In­sti­tute of T&T and I made a pre­sen­ta­tion on the con­nec­tion be­tween pro­cure­ment and mon­ey-laun­der­ing. Min­is­ter Rudy In­dars­ingh was there and he in­di­cat­ed that fi­nal­ly the 1960 pro­cure­ment leg­is­la­tion would soon be amend­ed and hope­ful­ly by some time next year there will be a mod­ern and up-to-date leg­is­la­tion to deal with present-day con­cerns.

How de­fi­cient, Mr Ra­j­coomar, is the cur­rent leg­is­la­tion?

First of all, it doesn't take in­to ac­count the mod­ern-day de­mo­graph­ics, the changes in so­ci­ety and so on. Re­mem­ber, every­thing was be­ing done by ten­der­ing process un­der the Ten­ders Board leg­is­la­tion and gov­ern­ments, since that time, have moved on and spe­cial-pur­pos­es com­pa­nies were es­tab­lished which spend tax­pay­ers' mon­ey.

How se­ri­ous a prob­lem is mon­ey-laun­der­ing in this coun­try and how dam­ag­ing is this il­le­gal prac­tice to the na­tion­al econ­o­my?

(Tak­ing a deep breath) Well, there are no re­al fi­nan­cial fig­ures avail­able from the Fi­nan­cial In­ves­ti­ga­tion Unit, but we know there were some 500 re­ports last year and, of those, no ar­rests or charges were made, ex­cept in the case of one woman who is now be­fore the court.

It means we have no re­al knowl­edge over how much mon­ey-laun­der­ing is go­ing through here. If I may re­mind you, in Ju­ly this year you had the Medicare fraud and mon­ey-laun­der­ing (US$173 mil­lion) which passed through sev­er­al banks, in­clud­ing two banks in Trinidad and To­ba­go, be­fore the mon­ey van­ished in Cu­ba.

It would be very in­ter­est­ing to find out from the banks how that man­aged to pass through here and how come they did not pick it up. If you look at the nar­co-in­dus­try, with some US$200 mil­lion be­ing the es­ti­mat­ed fig­ure of nar­cotics pass­ing through the Caribbean gen­er­al­ly and a sub­stan­tial amount of that is pass­ing through here, it means $200 mil­lion of il­le­gal mon­ey is pass­ing around.

What does this say?

Be­cause there is no tax­a­tion, as it is il­le­gal­ly in the sys­tem, it cre­ates in­fla­tion, it cre­ates an un­fair play­ing field for the or­di­nary man in the street.

How easy is it for the au­thor­i­ties at this time to de­tect in­stances of mon­ey-laun­der­ing?

The leg­is­la­tion we have is mod­ern leg­is­la­tion and the on­ly weak­ness it has to be cor­rect­ed by an amend­ment. But if the fi­nan­cial in­sti­tu­tions, ac­coun­tants, au­di­tors fol­low the red flag, then it would be an ef­fec­tive piece of leg­is­la­tion.

Mr Ra­j­coomar, in what ar­eas of the so­ci­ety would you find cas­es of mon­ey-laun­der­ing?

In high-cash ar­eas, high cash turnover such as the sale of jew­el­ry, cash for gold, re­al es­tate in par­tic­u­lar. There was a scam with lit­i­ga­tion, where mon­ey-laun­der­ers would re­tain the ser­vices of an at­tor­ney and they would lat­er say they want back their mon­ey. Of course, you would then have le­git­i­mate mon­ey, be­cause they would be paid by a cheque.

And re­mem­ber, mon­ey-laun­der­ers do not mind los­ing some of the dirty mon­ey, be­cause what they are in­ter­est­ed in is in get­ting part of it when it is cleaned. You al­so have in­stances of peo­ple who would buy in­sur­ance and then can­cel the pre­mi­ums... get back the re­fund on pre­mi­ums.

How easy is it for lawyers to smell a rat...in terms of mon­ey-laun­der­ers try­ing to palm off dirty mon­ey?

You know, the reg­u­la­tions do now ap­ply to lawyers and if we fol­low the com­pli­ance man­u­al and we do a prop­er due dili­gence we should be able to pick up a prob­lem with the source of the fees. For ex­am­ple, if a man walks in­to your of­fice with $100,000 in cash, you should won­der where that mon­ey came from and why doesn't he go to the bank. The act takes care of that, which tells you that you should be wary of any­thing over $6,000.

That is the red flag you spoke about...and a lawyer can be pe­nalised in this sit­u­a­tion?

Yes. Be­cause you are re­quired to tip off. By law they should pick it up. By tip­ping off you have to tell...you send off what is de­scribed as a sus­pi­cious ac­tiv­i­ty re­port to the FIU.

You can­not tell your client what you have done... Now, sev­er­al things could hap­pen here: it is ei­ther they in­ves­ti­gate or leave it alone or they may charge the per­son. They may write telling you to please con­tin­ue the trans­ac­tion but un­der their (FIU) su­per­vi­sion, and what that tells you is they would be do­ing a sting op­er­a­tion.

So from your van­tage point, is it easy for some­one to en­gage in mon­ey-laun­der­ing prac­tices?

I am not sure. But if peo­ple fol­low the leg­is­la­tion it should not be; some are go­ing to slip through the cracks and it de­pends on how care­ful or dili­gent you are.

Can I take it for grant­ed, Mr Ra­j­coomar, that the or­di­nary man in the street does not en­gage in mon­ey-laun­der­ing?

Yeah. You could take it for grant­ed, be­cause re­mem­ber, it is a three-step process. First of all, you would have the dirty mon­ey and you have to find a way to get it in the sys­tem. The or­di­nary man in the street is not go­ing to have huge amounts of mon­ey and that is why the leg­is­la­tion is tar­get­ed to cer­tain in­sti­tu­tions-ob­vi­ous­ly fi­nan­cial in­sti­tu­tions, ac­coun­tants, au­di­tors and that sort of thing.

Those are the peo­ple who the cash would be com­ing to. The or­di­nary man would be con­cerned about pay­ing his bills; he won't be tak­ing mon­ey to give back to an­oth­er man.

You have writ­ten a book which was re­cent­ly launched on this mon­ey-laun­der­ing is­sue. What was the mo­ti­vat­ing fac­tor?

At a re­cent sem­i­nar we re­alised that lawyers were at sea with that, and if they were, then it meant the or­di­nary per­son would al­so be in trou­ble. It was al­so clear that the de­mo­graph­ics of mon­ey-laun­der­ing are chang­ing al­so on an hourly ba­sis... the type of schemes that are be­ing used.

The Amer­i­cans, by way of ex­am­ple, now tag on mon­ey-laun­der­ing to just about every­thing; once you have com­mit­ted an act of dis­hon­esty, mon­ey-laun­der­ing is in­volved. Any act of fraud and any­thing like that-mon­ey-laun­der­ing is added. The ef­fect of that is to get back the mon­ey...to take the prof­it out of the crime.

Again, Mr Ra­j­coomar, from your van­tage point, is mon­ey-laun­der­ing a se­ri­ous prob­lem in T&T?

It has to be. I mean, if you look at that book...I think it is some­where right now (he re­trieves the book, en­ti­tled Co­caine Traf­fick­ing in the Caribbean, from among doc­u­ments on his desk), and they set out a US$200 mil­lion amount of co­caine pass­ing through here. If that is the mon­ey that is be­ing laun­dered here, it tells the ex­tent of the prob­lem.

Do you think, Mr Ra­j­coomar, that the Gov­ern­ment is tak­ing se­ri­ous­ly this ques­tion of mon­ey-laun­der­ing?

Well, I was very hap­py at the pro­cure­ment sem­i­nar to find out that our gov­ern­ment is in fact com­pli­ant with in­ter­na­tion­al reg­u­la­tions on this mat­ter and that they have just passed the in­ter­na­tion­al test. Our Caribbean neigh­bours have not man­aged to get past where we are, so mere­ly pass­ing in­ter­na­tion­al test shows that our gov­ern­ment is do­ing some­thing about this scourge and is tak­ing it very se­ri­ous­ly.