…FIU flags close to 1, 500 suspicious transactions
…significant number of reports made by money transfer agencies
THE Financial Intelligence Unit (FIU) has flagged over 1500 suspicious money laundering transactions between 2016 to present, most of which were transmitted through money transfer agencies, Director of the unit, Matthew Langevine, has disclosed.
Already, for the first quarter of 2019, 70 suspicious transaction reports have been filed as the money transfer agencies and other financial institutions in the country join forces with the FIU to close out avenues for suspected money launderers. In an interview with Guyana Chronicle, Langevine said in recent years, there have been consistently high levels of suspicious transaction reports filed. “Our analysis suggests that this may (be)because of the stringent AML measures implemented at commercial banks that the MTAs are now one of the preferred medium for the money transfers done by suspected launderers,” Langevine told this newspaper.
He noted that a significant majority of the total reports were made by Money Transfer Agencies (MTA). “Our observation of a sample of MTA (Money Transfer Agencies) data over the period 2016-2018 provides indications that MTAs are being used to create layers of transactions, facilitating the distancing of illicit funds from its source through a series of complex transfers. Sending funds through MTAs, while acting in one’s own capacity or as a proxy, affords a criminal an opportunity to place illegitimately acquired money into the financial system; sometimes by direct credit of MTA transactions to accounts of the final recipient,” the FIU explained in its report.
It was noted that during the reviewed period, a few cases where multiple subjects sent multiple transactions to a single individual in the United States of America were observed. Citing an example, the FIU pointed out that there was a group of three individuals who each sent identical amounts to the same recipient in the USA. Two of the three senders each remitted money to two other common recipients, in the USA, with common surnames. Approximately GY$4.M each (USD $20k) were remitted by these individuals.
The FIU Director said that often times the transactions are inconsistent with their employment profiles, and such was the case of a 38-year-old woman. “In June 2018, it was reported that a thirty-eight-year-old customer who sent several transactions to the United States of America, the total of which exceeded GY$2.5 M, was unable to provide any information on the source of funds for the transactions. The customer appeared to be operating for or on behalf of a connected third-party. The customers were in the habit of manipulating the surnames and given names (interchanging) of either sender or receiver to prevent the MTA connecting related transactions,” the FIU pointed out in its report.
Langevine noted that the two main methods used by criminals to launder money through money transfer agencies appear to be “structuring” and “flipping.” Structuring refers to the fragmenting or breaking up of a large transaction into several smaller transactions into amounts below the reporting threshold to avoid the triggering of the reporting requirements while Flipping refers to the further transferring of cash received.
“They try to do smaller transactions so that they are not flagged, but what many of them do, they go to different locations and send transactions on the same day or they may have different persons sending transactions to the same beneficiary on the same day or within days. So they use different methodology hoping that the transactions are not identified,” Langevine said as he further explained the method of structuring used by money launderers.
Alluding to the report, the FIU Director noted that there were also a few reported cases involving subjects entering money transfer agencies, sometimes accompanied by others, receiving transactions from territories such as the USA and Finland and immediately resending similar amounts to jurisdictions like Nigeria and Benin. According to the FIU, Nigeria is known for a high incidence of consumer fraud and religious extremism.
“A forty-five-year-old woman, who claimed to be unemployed, received five transactions from Zimbabwe, each valued at approximately GY$100,000 and immediately after receiving each of these transactions, sent a transaction of a slightly lower value to a receiver in Ghana and, on each occasion, she claimed that the recipient in Ghana was her friend.
“In October 2017, a forty-five-year-old female received approximately GY$40,000 from a sender in the Philippines and immediately sent a similar amount to a receiver in Nigeria. A thirty-one-year-old female, who claimed to be a vendor, sent transactions to Haiti, Dominican Republic and Colombia over a period of six months after receiving GY$1.4M in eleven transfers from the USA, Cape Verde and Antigua and Barbuda,” the FIU detailed as it cited a number of cases in its report. Another customer sent a total of GY$1.8M via forty transfers to Nigeria, some of which were sent immediately after receiving a transfer from the USA.
It was noted that remittances from Guyana to destinations such as Colombia, Panama, The Dominican Republic and Brazil are likely sent by locals and illegal aliens predominantly involved in Trafficking in Persons (TIP) and illegal mining. Langevine said the belief is based on intelligence received. “Guyana does not do a lot of trading, business activity with Colombia, but the volume of money and the number of transactions we see going to Colombia, along with other evidence, could only lead us to think one thing, and similarly with the US. Monies coming back and the regularities and the kind of unusual persons sending and receiving are inconsistent with their profiles,” he further explained.
Based on the suspicious transaction reports filed, the FIU Director said the average amount of money transmitted at a time by these suspected money launders is between $155,000 and $200,000 but reiterated that they would engage in more than one transaction over a given period. He said while new names have popped up in the first quarter of 2019, the categories of persons involved in these suspicious transactions remain the same– taxi drivers, clerks, students, housewives, employees in the hotel industry and the unemployed. He explained that while some persons have been blacklisted by some money transfer agencies, new persons are coerced into laundering money.
Upon receiving the reports, the FIU hands them over to the Special Organised Crime Unit (SOCU) in keeping with its mandate.
The FIU Director, while applauding the work of the money transfer agencies and financial institutions for bringing to its attention suspicious transactions, there is need for more training. It was explained that continuous training to frontline staff will equip them with the knowledge and expertise to quickly detect possible cases of Money Laundering and Terrorism Financing. Reports are expected to be submitted within three days of forming the suspicion. Langevine said much more could be done to bring awareness to customers utilising money transfer agencies on the dangers and consequences associated with money laundering. It is believed that infomercials in public waiting areas can also be embraced.
In its quest to intercept illegal transactions, the FIU has published a list of indicators or ‘red flags’ based on the analysis conducted. These indicators include very frequent transactions over a short period of time, a single customer receiving transfers from a high number of senders, a single beneficiary of multiple remittances in relatively small amounts during a short period, and transfers done in small amounts from different MTA agents to various beneficiaries.
The U.S Department of State, in its recent report, said Guyana has made significant progress on Anti-Money Laundering (AML), and though it urges more investigations and successful prosecutions, it concluded that the President David Granger Government has shown the political will to tackle this scourge. In a further demonstration of this commitment, Attorney-General and Minister of Legal Affairs, Basil Williams, recently appointed a new assistant solicitor-general with responsibility for Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT).
The legal affairs minister said, too, that Guyana’s National Risk Assessment (NRA) report has identified and acknowledged that cambios and money-transfer entities pose a high risk to the AML regime. In 2018, the Ministry of Legal Affairs announced that a risk-based supervisory approach would take effect to closely monitor money transfer services and cambios. Coupled with that, the Legal Affairs Ministry has been conducting a series of Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) outreaches and sensitisation seminars as it seeks to raise awareness and build capacity. Minister Williams said, this year, the Legal Affairs Ministry will be intensifying its efforts through countrywide outreaches and other initiatives.