FRAUD SPIKE

Nearly 3,000 complaints of fraud involving more than $6 billion have been reported to the Jamaican police in the last five years, new figures have revealed.

The disclosure comes amid a flurry of multimillion-dollar fraud cases uncovered at several private companies, topped by the billion-dollar fraud at the investment firm Stock & Securities Limited.

Between 2018 and last year, 2,932 cases of fraud involving J$2.7 billion, US$30.5 million, and £220,000 were reported to the police’s Counter-Terrorism and Organised Crime Division, officials disclosed on Monday.

The complaints led to a total of 805 arrests.

Last year alone, the police say there were 789 fraud-related complaints involving J$414 million and US$20 million.

Banking giants National Commercial Bank and First Global, manufacturing and distribution conglomerate Seprod Group, and fast-food franchise Burger King are among the companies rocked by allegations of employee theft.

Last week, the police filed fraud-related charges against 14 of 17 current and former employees of Seprod, who are accused of defrauding the company of approximately $160 million.

A week earlier, the Burger King outlet in Harbour View, St Andrew, which opened almost four months ago, was rocked by a $10-million fraud. Five employees, including a supervisor, have been arrested and charged.

While underscoring the importance of observing the due process to protect the rights of workers, Metry Seaga, president of the Private Sector Organisation of Jamaica (PSOJ), said it is also difficult for companies when employees are caught “red-handed” stealing or fighting.

“When an employee wrongs the company, the long-term impact on the company’s progression from the incident results in some employers becoming gun-shy when they are hiring people,” Seaga told The Gleaner.

“Companies are afraid to hire people and to invest in them and to train them.”

David Wan, president of the Jamaica Employers’ Federation, suggested that the impact was greater for small businesses, who are “hit hard” by wrongdoers and are most times unable to recover because of limited resources.

These entities, Wan said, would find it very costly to replace the money or valuables stolen in addition to recruit new employees.

He said that the possible long-term impact of such “damaging actions” would result in companies becoming financially unstable and, ultimately, jeopardise the employment of others.

“Employee morale can [also] be affected if the company suffering fraud losses tightens security and monitoring of all employees after suffering fraud,” said Wan.

The PSOJ president complained, too, that employers encounter numerous challenges trying to terminate workers suspected of being involved in fraudulent activities.

According to Seaga, cases that go before the Industrial Disputes Tribunal (IDT) are often settled in favour of the workers.

“This has happened significantly in the past,” he said.

The IDT is a quasi-judicial body established in 1975 through the Labour Relations and Industrial Disputes Act to settle employer-worker conflicts involving unionised as well as non-unionised workers that are referred by the labour minister, who has responsibility under the law.

The IDT issued 44 awards in 2020, including 16 settlements and 17 awards in favour of aggrieved workers and 11 awards in favour of companies.

In 2021, there were 25 awards, with 12 in favour of the workers and one in favour of a company. Thirty-four awards were made the following year, with 16 in favour of workers and five in favour of the companies.

An IDT spokesperson acknowledged that a majority of cases are decided in favour of the employee, but insisted that this was not an indication of bias as the quasi-judicial body is guided by the facts presented.

Noting that there must be strict adherence to the country’s labour laws, the spokesperson, who did not want to be named, told The Gleaner that when a worker is accused of an infraction, it must be proven.

“It could be something as simple as ... non-performance or poor performance ... . You have to take the case to us and prove it. Natural justice has to come in place,” the spokesperson said.

“Don’t care how you have all the reasons in the world to dismiss the employee, the mere fact that you didn’t go through the [correct] procedure, the dismissal has to be found unjustifiable and in the worker’s favour,” the spokesperson added.

A total of 551 fraud complaints were reported to the police in 2018 involving J$705 million, US$2.6 million, and £79,000, according to the police data. Some 121 people were arrested on fraud-related charges that year.

The following year, the police say 197 persons were arrested and charged arising from 620 complaints involving J$644 million, US$5.6 million, and £29,000.

The number of fraud-related complaints declined in 2020 as Jamaica grappled with the outbreak of the coronavirus before they started to inch up again, the data shows.

There were 352 complaints that year involving $485 million, US$1.1 million, and £87,000 with 125 arrests.

But by 2021, the number of complaints began creeping up to pre-COVID levels with 620 reported cases involving J$430 million, US$1.2 million, and £5,556.

editorial@gleanerjm.com