Trinidad: FIU uncovers $27B in suspicious transactions

Billions under suspicion.

A total of 1,831 Suspicious Transaction and Suspicious Activity reports worth $27 billion were received over 2019 to 2020 by the Financial Intelligence Unit of Trinidad and Tobago – the most it has received in its 10-year history.

The increase has been attributed to increased fraudulent activity – including resulting from the COVID-19 pandemic – and demonetisation of the cotton $100 notes.

However, there was an 88 per cent decrease in Suspicious Transaction/Activity reports on suspected terrorism financing, apparently due to the collapse of the ISIS terrorist group.

The information came yesterday from the FIUTT’s report for October 2019 to September 2020. It was laid in Parliament by Finance Minister Colm Imbert, who spoke on it.

In the reporting period between 2019-2020, the FIUTT adjusted its supervisory activities due to the challenges of COVID-19.

The national efforts to reduce the potential impact of the pandemic led to the temporary closure of business in high-risk sectors such as private members’ clubs, vehicle sales and real state. But supervisory and monitoring activities continued with the necessary adjustments.

For this reporting period, 329 entities registered with the FIUTT – bringing the total number of registrants to 3,337 at September, 2020. This represented a 10 per cent increase from the previous reporting period.

During the reporting period in the area of financial intelligence – and for the first time – it was noted that the FIUTT received a total of 1,831 Suspicious Transaction Reports/Suspicious Activity Reports (STR/SAR).

This was the most it has received throughout its ten years of existence. This represented an 80 per cent increase from the previous reporting period.

Also, during the reporting period, the FIUTT noted a 141 per cent increase in (STR/SAR) submissions from financial institutions and an 80 per cent increase in the submissions from listed businesses, compared to the previous year.

The total monetary value of the 1,831 STR/SAR reports received over 2019-2020 amounted to approximately $27 billion. The figure was $1.7 billion in the previous reporting period.

Of the 1,831 reports received, 1,517 were completed transactions worth $884.4 million.

But 314 attempted transactions were worth $26 billion. The main reason for this was customers approaching banks with suspected fraudulent contracts and pending incoming wire transfers.

On the overall increases in suspicious transaction/activity reports, the FIUTT’s report stated, “When compared to the previous reporting period, the significant increase in both the number and value of these attempted suspicious transactions can be directly attributed to the following:

“Increase in fraudulent activity – Numerous customers being scammed with fake/fraudulent foreign contracts to engage in business expecting millions of US dollars or Euros to be wired to their local bank account.

“Also, the COVID pandemic resulted in an increase in fraudulent activity being perpetrated against people. Transactions that were flagged and stopped included numerous third party transactions being attempted between unconnected parties under the guise of payments for “gifts,” “blessings” or sou-sou.”

Also contributing to the increase was the old $100 bill demonetization process where several transactions were flagged and stopped.

Reporting entities were unable to verify the source of old bills due to the inability of the people/entities conducting transactions to provide sufficient proof of source of funds.

The FIUTT’s report stated that the demonetization exercise of the old cotton-based TT$100 currency note resulted in a significant increase in the submissions of STR/SAR reports by reporting entities – 750 received.

The FIUTT is still seeing STR/SAR from reporting entities related to the demonetization process.FIUTT acting director Nigel Stoddard stated, “It is evident that coming out of the demonetization exercise, the amount of cash exchange or attempted to be exchanged, lacked transparency in certain instances to properly identify their source of funds.

“Therefore, such cash-intensive environments increase the risk of money laundering and facilitate criminal conduct. This FIUTT continues to recommend that the authorities give serious consideration to introducing some form of cash threshold when conducting business interests.”Ponzi Sou, romance scams

The report noted an increasing prevalence of online scams and ponzi/pyramid schemes. Analysis revealed the existence of criminal networks where people were being defrauded via online romance scams, online marketplace scams and others.

Through fictitious Internet profiles, scammers developed “romantic relationships with victims. Also, in online market scams, scammers offered goods and services for sale and failed to deliver the items after part or full payment.

This occurred as far back as 2018 but the pandemic facilitated an increase in social media activity, as well as opportunities for exploitation by perpetrators.

It also stated that there was a noted increase in the incidence of Ponzi/Pyramid schemes being operated under the guise of “non-traditional sou sou” and operated as “investments” schemes with the names Loom, “Giving Circle and Blessing Bank to name a few.”

Religious ministers, politically exposed people also probed

The Financial Intelligence Unit of T&T has noted that STR/SAR reports were done on 22 ministers of religion and six on politically exposed people in its last reporting period.

The latter six is a 46 per cent decrease from the previous reporting period.The FIUTT noted that people in suspicious transaction reports included self-employed, from construction, business owners and persons in the hotel, law and law enforcement fields. Pensioners/retirees were also noted.

Increased suspicious transactions – 30 per cent – were noted by reporting entities in Central Trinidad, followed by San Fernando and Port-of-Spain, northern T&T, West, the East and Tobago.

Suspected tax evasion also ranked the highest among the five most common reasons for the submission of STR/SAR reports to the FIUTT.

In the 2019-2020 reporting period, the most common suspected criminal conducts listed by FIUTT were tax evasion (539), money laundering (530), suspicious financial activity (401), fraud (205) and drug trafficking (92).

These five suspected criminal conducts accounted for 97 per cent of the total number of STR/SAR Reports submitted and 99.89 per cent of the total monetary value of all STR/SAR Reports submitted.

The FIUTT received 12 STR/SAR reports on suspected Financing of Terrorism compared to 97 in the previous reporting period. This represented an 88 per cent decrease of Financing of Terrorism-related STR/SARS and may be attributable to the apparent collapse of the ISIS. Eleven intelligence reports linked to foreign terrorist fighters were noted.


By Gail Alexander, March 2021, Published on Trinidad Tobago Guardian

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