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Jersey’s finance industry is increasingly the target of international tax evaders, cyber-criminals and gangs committing romance fraud, according to a new report which sets out the methods by which the island might be used to launder money.
On Wednesday, the latest edition of a document identifying ‘typologies and trends’ in Jersey is published, which aims to help practitioners identify how the industry might be targeting by criminals.
Its release is one of a series of measured aimed at making sure the island is prepared for an evaluation by European monitoring group Moneyval, which is assessing the island’s compliance with international standards.
Its evaluation has already begun but will reach a critical point in September, when a team of inspectors visit the island.
One of the typologies is romance fraud, which is typically when a criminal adopts a fake online identity to gain a victim’s affection and trust.
The scammer then uses the illusion of a romantic or close relationship to manipulate and/or steal from the victim.
Explaining more, Barry Faudemer – a former Director of Enforcement at the JFSC who helped write the report – said: “I have met lots of victims of romance fraud, including those who have gone on to steal money from their employer and been imprisoned because of their manipulation.”
He added: “I know of a shop owner in St. Helier who traded for 40 years, building up his savings along the way.
“But by the end of the romance fraud, he could not put a loaf of bread on the table and his family had to support him.”
Mr Faudemer said that national media reports had identified Chinese gangs who target vulnerable people, ‘financially grooming’ them over several months, and then encouraging them to buy, for example, large quantities of virtual assets.
He said the finance industry needed to be aware of methods employed by romance fraudsters, who could use Jersey-based structures to hide their criminality.
Mr Faudemer was speaking at a gathering of finance industry professionals focusing on how the island is preparing for the key Moneyval evaluation.
Other types of financial crime likely to be more prevalent in Jersey include people using Jersey to evade tax, hiding money gained through corruption, and retail fraud, which increased substantially during the pandemic.
“Villains are not buying shotguns today; they are buying computers,” said Mr Faudeumer.
Pictured: Former police officer and financial regulator Barry Faudemer is a member of Jersey's National Risk Assessment Working Group.
The publication of the money laundering typologies is one of several documents that have been or will be released before the visit of Moneyval later this year.
A key one, Jersey’s ‘National Risk Assessment’ was published in September 2020, and will be updated in the coming months.
Other measures already brought in include updating the ‘Suspicious Transaction Report’ template, which practitioners have to fill in and submit if they suspect criminal activity, increasing the number of enforcement and supervision officers, and introducing new legislation to allow ‘Deferred Prosecution Agreements’.
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