Money launderers have been targeting the Virgin Islands hospitality industry, the Financial Investigation Agency warned recently.
The agency’s Financial Investigation Unit issued a press release last month advising hotels, resorts and guesthouses to be on the lookout for scammers making false reservations under the names of reputable individuals and businesses.
“They often pay for the reservation using a cashier’s cheque to the bank account of the hotel or guesthouse and then cancel and make a request for a refund via email,” the release stated.
Once the cheque is cut, the money launderer then takes it to a bank.
The goal of the scam, the agency ex- plained, is to conceal funds gained from illegal activity — for example, drug or human trafficking — and introduce it into the banking system, which otherwise wouldn’t accept the deposit.
“The hotel or guesthouse would facilitate the refund by cheque, so the ill-gotten gains would then be introduced into a financial institution from an apparently legitimate source,” the agency stated.
It added that any amount the hotel keeps as a cancellation fee is written off by the money launderer as the cost of doing business.
‘Money muling’
The scheme is a variation of the common “money muling” scheme that the FIA has previously warned about, in which the launderer gives money to an individual to deposit in a bank account or in exchange for purchasing gift cards and other items in return for a small “commission” for making the transaction.
Typically, the perpetrator asks for full bank details and then asks the victim to transfer a percentage of the money to another account and to keep the rest.
“Alternatively, there have also been instances of persons being asked to buy gift cards, such as iTunes vouchers, in return for keeping a percentage of the monies they were sent,” the FIA wrote in a warning issued in May. “These are all instances the general public should be wary of.”
Sometimes these scams come under the guise of legitimate employment ads and opportunities, the agency noted. However, in most cases, the money transferred into the victim’s account was obtained illegally.
“Your actions and contribution in the scheme are enabling criminals to legitimise the monies. Simply put, you are helping criminals move their funds around,” the FIA warned. “This is a criminal of- fence under the laws of the Virgin Islands, even if you did not know where the monies came from. Apart from criminal prosecution, you also run the risk of being blacklisted by the banks.”
Hard to spot
According to the agency, the scams can be hard to spot, because the perpetrators appear at first to be legitimate customers.
“They can be highly sophisticated and perpetrated by familiar persons or businesses,” the May release stated. “The FIU is therefore reminding banks and hoteliers of their legal obligation to report any suspicious activity under penalty of law.”
The agency advised businesses that they can report money laundering schemes or any other suspicious activity by completing a suspicious activity report form at https://tinyurl.com/SAR-Form.