In a “Typologies” report due out today the unit highlights some of their more sensitive cases, as they circulate their data from 2016.
CINews was given a sneak peek into the report and one case that immediately jumps out from March of last year, was when a foreign individual on the FBI’s wanted list, was foiled by the FIU when they attempted to set up an entity in the Cook Islands.
The same individual then tried the same overseas-based setup with two other local trust companies, but again was blocked by the agency through further investigative work.
Although the FIU’s cases are shrouded in secrecy and few specific details are available in the public domain, it still makes for interesting reading and will be accessible on the unit’s website soon.
Cook Islands FIU head Phil Hunkin says the report presents a snapshot of how criminals are seeking to misuse the Cook Islands financial system or exploit key products and services as a vehicle to facilitate, or to further disguise the nature of their criminal behaviour.
Other cases involve alerts about individuals and international crime groups participating in various syndicate activities around the Pacific, that have far-reaching consequences for the region.
A law enforcement official from the United Nations Office on Drugs and Crime says that organised crime groups have found that by bribing key officials in South Pacific countries, they can operate with virtual impunity.
Criminals have been targeting vulnerable Pacific Island nations to traffic drugs to lucrative markets in Australia and New Zealand. The issue is not strictly limited to narcotics, and can include people and gun smuggling.
However, the main area of concern for the FIU in the Cook Islands is the increase in the number of cyber fraud cases presented in 2016. While there were only seven in total for the year, they have the potential to escalate in future, as many more people locally use online financial services.
The FIU now captures records of all funds transfers in and out of the Cook Islands, says Hunkin.
In November 2016, a criminal managed to defraud a foreign national of $30,000 for binary shares from his local trust account over the internet.
With passport security upgrades becoming tighter internationally, only one incident of fraudulent identification was picked up by the unit in 2016. A woman had used forged documents in the remittance of $29,500 worth of precious metals from an overseas bank.
In a fraud case in August 2016, a wire transfer to a foreign bank account from an overseas company was later deemed to be providing illegal services to investors, buyers and sellers in the US securities market.
In one of the largest cases identified by FIU in 2016, law enforcement officials in a foreign jurisdiction were notified by the FIU of a $230,400 remittance. The transaction was processed, even though the person concerned had $2.148 million in seized assets and had previously been imprisoned for nine years. The country receiving the funds was not listed on a forfeiting register.
FIU also investigated a local worker who received a lump sum of $3,000 into his bank account, as it was outside of the remitter’s normal behaviour. It turned out the funds had been deposited into his account via a Facebook friend who needed assistance in transferring funds overseas.
He was meant to forward the money onto the online friend for a small commission, but instead withdrew all of the money to pay off local debts. Three quarters of the funds were recovered and no criminal charges were laid.
The total number of Suspicious Activity Reports investigated by FIU equated to just over $508,000 for 2016.
These typically include transfers in and out of accounts totalling more than $10,000, or any other transaction that is deemed suspicious.
Banks made up the bulk of the transactions, followed by trusts, and money remitters.
The total number of SARs received by FIU since 2012 have been falling year on year from 52, down to 39 in 2016.
Unsurprisingly, Cook Islands nationals top the list for local suspicious activity reports, followed by persons from the US and China.
For overseas jurisdictions, the US, and New Zealand take out the two top spots.
Other intelligence received by the unit includes: Border Currency Reports of persons entering the country with more than $10,000 on their person, as well as high volume transactions, local company thefts, and even non-suspicious transactions.
The next pressing matter on the radar for the FIU, is that the Cook Islands is about to undergo a mutual evaluation in November. With their engagement and compliance examinations of local reporting institutions recently completed, they are set to meet their regulatory Financial Action Taskforce requirements.