The findings of a financial crime report on Latin American and Caribbean countries estimate that crime proceeds in Trinidad and Tobago are valued between US$482 million and US$1.2 billion ($3 to 7 billion TT) annually.
The Global Financial Integrity (GFI) report found that it was likely that ten per cent or less of criminal proceeds are detected by the Government.
And of the criminal proceeds estimate, between US$337 million to US$884 million is likely laundered, according to the October 2021 report, entitled “Financial Crime in Latin America and the Caribbean: Understanding Country Challenges and Designing Effective Technical Responses.”
GFI, a Washington, DC think tank, based their proceeds estimate on a consensus range of three to five per cent of gross domestic product.
GFI found that despite attempts by the Trinidad and Tobago Government to address loopholes in financial crime legislation, this country continues to have issues with the enforcement of financial crime laws.
All experts interviewed for the report identified money laundering as the largest financial crime; corruption and trade-based money laundering tied as the second and third largest; while trade-based money laundering and terrorism financing tied for third and fourth.
"Drug trafficking was the only underlying offence named as a primary source of illicit financial flows (IFFs). However, the Financial Intelligence Unit of Trinidad and Tobago has also commonly cited tax evasion and fraud as important crimes…Businesses and front companies, real estate, and private member clubs were the top-named channels for IFFs, followed by banks, remittances and cash. One expert mentioned lawyers as the top facilitator of IFFs," the report stated.
According to the report, law enforcement, customs and immigration officials, army personnel, and high-ranking government officials have facilitated and/or operated trafficking and fraud schemes, "such as drugs, humans, and pyramid schemes, as well as bribery and money laundering; some have been prosecuted."
Government experts, who were interviewed as part of GFI’s project, reported a noticeable increase in fraud in the country.
They said there were increases in Ponzi/pyramid schemes, business email compromises and romance scams, which they attributed to increased online activity at home during the COVID-19 pandemic.
Also of concern to government experts was the informal savings/loan sector, known as sou-sous. They told GDI that sou-sous presented a fraud, money laundering and terrorist financing risk as they were unregulated and unsupervised.
In December 2021, the Government introduced a law to make financial schemes illegal–the Finance Bill (No 2) 2021.
The bill is seeking to impose a penalty of ten years imprisonment and $10 million for anyone found guilty of establishing or operating a prohibited scheme.
As further evidence that cash is a popular channel for money laundering in T&T (referred to as a cash-based society), a large uptick in suspicious transactions was observed during the currency exchange, demonetisation process in 2019, where many exchangers/depositors failed to provide sufficient proof of source of the funds.
The casino and gambling industry was another major source of concern, with the report stating that despite the passage of the Gambling (Gaming and Betting) Control Act in 2021, there appears to be a lack of political will to combat illicit activity in the industry.
The report indicated that financial crimes committed in the industry had important implications for government revenues.
While most types of financial crimes in T&T were reported elsewhere in the region, Trinidad was relatively unique with its terrorist financing issues.
According to the report, T&T had problems with citizens travelling to Iraq and Syria to join the Islamic State.
"Per expert interviews, common terrorist financing methods involved the use of money remitters, as well as the use of prepaid debit cards issued by T&T financial institutions in high-risk jurisdictions," the report stated.
T&T’s proximity to Venezuela posed major financial crime challenges of its own through narcotics and narcotics proceeds.
"Cannabis seizures appear to be consistently much larger than cocaine seizures; cannabis with high THC levels is typically imported from the US, Canada, and St Vincent and the Grenadines, whereas cannabis from Venezuela transits T&T on its way to other Caribbean islands," the report added.
Vulnerabilities and weaknesses in combating financial crimes
T&T’s main vulnerabilities and weaknesses in combating financial crimes were found in the report to be: Firstly, an extremely long judicial process. which experts said allowed individuals with deep pockets to hire the best lawyers to drag things out; Secondly, poorly-enforced anti-corruption laws, for example, the lack of enforcement of the Integrity in Public Life Act; Thirdly, the Gaming and Betting sector, both legal and illegal, which, the report stated, raises serious concerns that illegal gambling is linked to money laundering.
The report recommended that future support for T&T should be focused on: the Government’s efforts to create specific courts and judicial officers that are dedicated to dealing with financial crimes; Providing training to the Government on virtual assets and helping the Government create a training/awareness private-sector program; and guiding the drafting of a comprehensive, adaptive consumer protection bill that will explicitly ban pyramid and Ponzi schemes.
Out of a possible score out of five, T&T was given an average Policy and Law Enforcement Response score of 2.7. The score, based on a compilation of local expert interviews, found the country’s main weaknesses in policy and law enforcement response were political will, prosecution and capacity.
Comparatively, Barbados received a score of 2.5, Haiti a score of 1.0, Jamaica a score of 2.75, Mexico a score of 2.5 and Venezuela a score of 1.33. Barbados was found to have an absence of laws and poor implementation, while Jamaica was found to have a lack of resources, political will and weak investigations.
Criminologist: Fraud Squad needs much more resources
Like the findings of the GFI report, criminologist and author Dr Daurius Figueira also believed that T&T faces challenges in investigating and prosecuting financial crimes–both low-level and high-level.
Concerning low-level financial crime, he said the Police Service’s Fraud Squad was overwhelmed by the number of reports it receives.
"The Fraud Squad is swamped. Fraud Squad needs much more resources than is being allocated to it because every big bacchanal in Trinidad and Tobago is homicide and gang this and gang that, and all the resources are going there. But there’s an epidemic of reports of financial crimes at the lower level," he said.
While lower-level financial crimes are well-reported, the criminologist said higher-level financial crime was comparatively underreported and even when it is reported, he said, there’s a lack of action.
"We have this ton-load of suspicious transactions being reported in billions of Trinidad and Tobago dollars and the question is, therefore, what happens after that? What is going on?” Dr Figueira asked.
He believed very few high-level financial crime reports turn into charges or convictions because of long-standing issues with capacity.
The first capacity issue, he said, is that the Financial Intelligence Unit of Trinidad and Tobago does not have the power to investigate suspicious activity and the cases must, therefore, go to an investigative arm of the police service.
"The investigative arm of the police service is under-resourced to handle the sophisticated criminal activity that has been red-flagged. These are not the ordinary types of criminals–to stick a gun in your face and rob.
"If they don’t have the resources, how do you expect them to fully investigate and then prosecute these transactions?" he questioned
He said the lack of resources made available to the TTPS to investigate and prosecute high-level financial crimes was a matter of political will, an issue identified in the GFI report.
According to the criminologist, it is, after all, the Government’s responsibility to provide police with the necessary resources.
"So that’s where you could get the suspicion that it’s deliberate. That the Government has complied with the demands of the North Atlantic with legislation, but you are not policing the legislation," Dr Figueira said.
FIU received more suspicious transaction reports in 2020
In 2020, the Financial Intelligence Unit reported receiving more suspicious transaction reports and suspicious activity reports during the period than any other period in its ten-year existence.
There were 1,831 reports.
According to the FIU, the monetary value of suspicious transaction reports/suspicious activity reports, during the period, was $27.1 billion TT, an increase of $1.7 billion TT from the previous reporting year.
Despite the increase in the monetary value of suspicious transaction reports/suspicious activity reports, the Financial Intelligence Unit received fewer requests for financial intelligence in 2020 than in 2019.
In 2020, it received 184 requests for financial intelligence on 598 subjects, while in 2019, it received 221 requests for financial intelligence on 636 subjects.
There are several financial crime laws in T&T, including the Proceeds of Crime Act of 2000, the Anti-Terrorism Act of 2005, the Civil Asset Recovery and Management and Unexplained Wealth Act of 2019, the Integrity in Public Life Act 2000, and the Prevention of Corruption Act of 1987.