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£3,396,124.05 in JERSEY benefit fraud – is it time to look more closely at MONEY LAUNDERING risk in Jersey?

02/10/2022

£3,396,124.05 [approx..] in benefit fraud since 2009 is a big number. It is a third of a new hospital. And looking at the [£] amount of proceeds of crime the Jersey courts have seized [not including the benefit fraud number] since 2017 [FOI records DO NOT go further back] [approx. £15,900,000] Jersey Fraud represents approx. 20%

These numbers come from a freedom of information request and Comsure’s Archives that go further back than the FOI information - see below.

These amounts should be considered in light of JERSEYGOV's recent publications about protecting the island's reputation and Jersey citizens from money laundering

As noted by JERSEYGOV
  • Fraud is a concern to the community where the victims reside. However, the crimes are often perpetrated by criminals based overseas, and the proceeds of crime are largely laundered outside of Jersey.
  • However, as is the case in many other jurisdictions, Fraud is a financial crime concern for Jersey.
  • It is believed that all elements of Fraud remain under-reported.
  • In a small jurisdiction, people are more reluctant to report Fraud,  

 

In reading JERSEYGOVS document, should BENEFIT FRAUD be looked at more closely?
  1. Apart from the two paragraphs above, the report does not talk about "BENEFIT FRAUD", nor does it talk about the role of the regulated community in ML SAR reporting in fraud detection.
  2. Why is this important?
  3. Since 2009 no one in the regulated community has been held to account for offering services to the £3,396,124.05 proceeds of crime.
For the avoidance of doubt
  • THE BENEFIT FRAUD IS MONEY LAUNDERING - Money laundering is where 'criminal property' [e.g. money from social security] has been gained from criminal conduct [a predicate crime, e.g. benefit fraud]. The benefit is used and controlled by either the fraudster and or another [a third party includes a family member of the fraudster][also a THIRD PARTY could be a financial services provider that provides products and services]. The FATF defines THIRD-PARTY ML as the laundering of proceeds by a person who was not involved in the commission of the predicate offence [benefit fraud]. Read more here:-
  • https://www.comsuregroup.com/news/jersey-benefit-fraudsters-are-money-launderers-how-long-before-local-service-providers-are-checked/

FN- Information from an FOI request [attached letter] and additional sources from Comsure’s archives
  1. How many successful prosecutions have there been for benefit fraud in Jersey between Jan 1, 2012*, and September 2022 = There have been 28 successful prosecutions for benefit fraud in Jersey since 2012.
  2. Concerning question No1 and considering each case between Jan 1, 2012, and September 2022, what was the GBP amount of benefit fraud the convicted person[s] were claiming [to be clear - the amount of benefit fraud per case] = Total = £1,299,196.05**
  3. Concerning question No1, how many convicted persons received a Community Service Order and how many a suspended sentence
  • Imprisonment only- 8
  • Suspended Sentence only- 2
  • Community Service order only- 4
  • Compensation order only- 1
  • Imprisonment & Compensation order- 3
  • Suspended Sentence, Community Service Order & Compensation Order- 1
  • Community Service Order & Probation Order- 1
  • Community Service Order & Compensation Order- 7
  • Community Service Order, Compensation Order & Probation Order- 1
Response
  1. Data is only available from 2012, which is when it was transferred to the electronic system. Data prior to 2012 is not held. Article 10 of the Freedom of Information (Jersey) Law 2011therefore applies.
  2. The amount of benefit fraud committed per case can be found in the table below.
2012 –
  1. £63,514.22
  2. £27,254.47
  3. £15,964.66
  4. £7,632.33
  5. £49,140.15
  6. £51,601.94
  7. £3,986.90
  8. £11,966.21
  9. £49,563.48
  10. £4,431.81
  11. £4,541.29
  12. £5,857.31
  13. £3,867.02
  14. £6,252.09
  15. £3,101.00
  16. £162,614.01
  17. £2,440.58
  18. £103,504.21
  19. £34,786.46
  20. £70,128.61
  21. £148,999.94
  22. £63,459.45
  23. £117,311.99
  24. £108,279.94
  25. £144,428.73
  26. £34,567.25

2022 Total = £1,299,196.05

ADDITIONAL READING

https://www.comsuregroup.com/news/jerseygov-publishes-red-lines-to-businesses-and-takes-control-of-the-jfsc-sound-business-practice-policy/

JERSEY