U.S. Report finds… Govt. corruption, narcotics among primary sources for money laundering

Apr 09, 2018 News

– FIU & SOCU need additional resources

Guyana continues to attract the attention of the United States (U.S) over deficiencies to tackle financial crimes, particularly corruption, money laundering and drug trafficking.
Narcotics trafficking and government corruption are the primary sources of laundered funds, according to the March 2018 International Narcotics Control Strategy Report (INSR)released by the United States Department of State Bureau of International Narcotics and Law Enforcement Affairs.
In the 2017 version of the report, the U.S. stated ‘corruption’ as a primary source for laundered funds, but this time they have specifically identified ‘government corruption’.
Other illicit activities, such as human trafficking, illicit gold mining, contraband, and tax evasion, are also sources.
The report cited that common money laundering occurs through fake agreements of sale for precious minerals used to support large cash deposits at financial institutions; cross-border transport of volumes of precious metals small enough to avoid scrutiny by relevant officials and the payment of the relevant taxes and duties; and using middle-aged and elderly couriers for cross-border transport of large sums of U.S. dollars.
While several agencies fight financial crimes, the U.S. noted that the investigative effectiveness of these agencies is limited due to inadequate human resources, insufficient training, and a lack of strong interagency cooperation.
The report also cited the business community’s lack of cooperation also hinders Guyana’s anti-money laundering (AML) efforts.

UK Fraud Expert Sam Sittlington (left) chatting with Head of SOCU Sydney James in the SOCU compound

The report noted that Guyana has taken steps to address money-laundering, pointing out that current legislation provides that the Financial Intelligence Unit (FIU) as the investigative authority into alleged money laundering.
Among the steps listed is the FIU’s completion of its risk assessment and action plan, which guides the government’s national AML strategy.
INSR noted that in July 2017, the FIU purchased software to detect illegal financial activities and sought to hire a financial analyst and a legal advisor. Further, the U.S pointed out that the FIU refers cases to the Special Organised Crime Unit (SOCU), an arm of the Guyana Police Force, for investigation and has submitted 11 money laundering reports to date.
“Suspicious activity reporting, wire transfers, and customer due diligence regulations should be strengthened and additional resources given to the FIU and SOCU. Reporting and investigating entities should improve their inter-agency coordination in the future,” INSR noted.
Some of the notable cases listed in the U.S. report include SOCU’s investigation of the Guyana Gold Board’s involvement in money laundering for a gold dealer who was arrested in April last year and an investigation into a hotel and potential casino operator, whose Surinamese partner was jailed in the Netherlands for money laundering in 2006.
“Guyana has made great progress on the AML front, but should continue to provide training to increase awareness and understanding of AML laws within the judiciary and agencies with investigative authority for financial crimes,” the report stated.
Apart from AML seminars to inform local reporting entities of their obligations and responsibilities under the AML regime, Guyana in January returned to British crime expert, Dr. Sam Sittlington to help SOCU with a number of complex financial-related cases.
He was featured prominently in a number of high-profile investigations last year, including the Pradoville Two matter involving ex-government officials. His stint ended last year but the administration asked for his return. Sittlington will be here until March 2020, in six-week and 24-week deployments.
The APNU+AFC government came to power in 2015 promising to take down corruption along with dismantling the network of financial crimes, but with no major convictions, particularly, in the political arena, there is growing discontent nationally.
A year ago, several members of the former People’s Progressive Party (PPP) administration, including former President and the party’s current General Secretary, Bharrat Jagdeo have been questioned by SOCU over a housing development known as Pradoville Two.

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