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Craigg: Fraudulent activity difficult to police

Combating fraudulent activity conducted by unlicensed firms in the country isn’t an easy task, despite efforts being made to prevent such activity, according to the governor of The Central Bank of The Bahamas.

“The measures are ongoing,”Wendy Craigg toldGuardian Businessyesterday.”The fact that much of this activity is conducted in an electronic environment, and from any point on the globe, makes it very difficult to police. However, local and international regulatory and policing agencies have ongoing efforts to find and prosecute offenders.

“Websites are routinely shut down, but reincarnations by a different name cannot be easily prevented.”

The Central Bank is attempting to neutralize such activity, issuing a warning against 66 unlicensed financial services firms that aren’t registered to conduct business activities in the country. Some companies were warned as early as 2002.

Based on the warning notice, which is posted on the Central Bank’s web site, most of the companies show the traits of a shell corporation–a firm that serves as a vehicle for business transactions without having a large amount of assets or operations.

“It should be kept in mind that most entities fraudulently promoting themselves as operating a bank in The Bahamas are not actually present in this jurisdiction, nor do they maintain an office presence elsewhere,”she said.”In the event a locally-based institution was unlawfully operating from this jurisdiction, we are primarily guided by those penalties provided under the Banks and Trust Companies Regulation Act 2000, which details possible fines and terms of imprisonment upon summary conviction.”The Central Bank governor said efforts will continue to combat this problem, noting that keeping the public notified of developments in that regard is an important factor.

“Fraudulent representations have long existed in the financial sector worldwide, and we have had a number of occurrences in The Bahamas,”Craigg said.”As part of our responsibility to ensure the integrity of our system, the Central Bank seeks to bring to the attention of the public those instances where The Bahamas may be implicated as part of such schemes.”

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