FID vows to cleanse country of dirty money

Keith Darien, principal director at the Financial Investigations Division (FID), has confirmed that his agency will be targeting persons involved in criminal activities who have been investing heavily in the real estate sector.

Last week, Minister of National Security Dr Horace Chang revealed that at least three main law-enforcement bodies, including the FID, will, this year, be focusing on the real estate market where ill-gotten money is being channelled to finance construction projects.

Chang, debating the Terrorism (Designated Reporting Entity) (Trust and Corporate Services Providers) Order, 2022 last week, said that the thrust seeks to strengthen the country’s legislative framework to combat money laundering and terrorist financing.

The principal director of FID told The Gleaner on Monday that several persons who have been convicted of serious crimes, including drug trafficking and money laundering, had made significant investments in the real estate market.

Darien argued that it was pivotal that law enforcement take a careful look at money laundering in the sector, noting that “the money being pumped into the formal sector can distort the economy generally because we don’t want ill-gotten gains to be used in any way at all in any of the sectors, whether it be used car, real estate or gas station ... .

“We just don’t want any dirty money to be financing these types of activities in Jamaica or anywhere else for that matter.”

The FID principal director pointed out that the risks faced by the real estate market and other sectors were outlined in the National Risk Assessment document published in August 2021.

The National Risk Assessment report highlighted the method used by some real estate developers to launder money. According to the report, it has been observed that the proceeds of crime have been used by criminals to finance real estate development projects as a means of laundering money in Jamaica.

The document sets out potential avenues for money laundering, among real estate developers:

• The development is 100 per cent self-financed and payments for labour and construction materials are made using mainly cash.

• The developer does not have a legitimate source of funds for the portion of the project that is self-financed.

• The expected cost of the completed project is significantly greater than the document cost. For example, a developer states that total expenditure for a construction project was J$100 million. However, based on the market, the cost of construction for a similar project is J$300 million. Additionally, the source of funds provided was for a fraction of the true cost.

• The developer sells units in the development for cash to individuals without concern for their source of funds, and rinses those funds through construction costs.

editorial@gleanerjm.com