Beware of fraud
Small business owners warned about dirty money
A former head of the Financial Intelligence Unit (FIU) is warning small business operators to be on guard against investors who want to pump money into their businesses to cover money-laundering activities.
Guyson Mayers gave that caution as he noted that there were many people who were in the practice of investing in small, struggling enterprises so as to appear legitimate.
The attorney-at-law, speaking during the Third Annual Barbados Investment And Financial Products Showcase at the Grande Salle of the Central Bank today, advised small business owners to carry out background checks and remain vigilant to avoid becoming pawns in illegal activity.
“We have seen in Barbados where persons have sought to fund struggling small businesses. Who among us, as a small business [operator], won’t have a cash flow problem at some point? If you go to a legitimate financial institution there are many requirements that you have to supply,” he said, speaking on the topic Anti-Money Laundering – What Are The Signs?
“Why wouldn’t somebody be interested in investing in your business? Maybe they see the light and the great enthusiasm you have for promoting your business and making it successful.
“But if somebody really does not know anything about your business activity – if you are making T-shirts and somebody is a plumber – what would encourage them to want to invest in a T-shirt manufacturing process? Yes, the money may be useful but if the person taking the funds to you and their line of business do not make sense to you that should be a red flag,” he added.
Mayers, who was once acting director of the FIU, said money laundering was occurring without many people being aware and he contended “the reality is [that] nobody is completely unaffected by this activity”.
He also advised businesspeople to know their customers and be wary of those who did not want to provide certain information such as an address.
“You may have somebody in the same field that you are in and they may seek to form an association with you or a partnership, but they will seek to use your company as the one to deposit the money . . . That too should be of interest to you,” advised Mayers.
“You cannot be operating in the business world and you cannot be swimming in the sea as a flying fish and [not] know that there are sharks in the shadows, otherwise you will be eaten without even knowing what ate you. So you look out for people or funds coming to your business that really do not make sense.”
In addition, he advised that all financial institutions employ “compliance functionaries” in order to ensure money laundering was kept at bay.
Meanwhile, speaking on the topic Why Do I Need A Financial Advisor, chartered accountant Fran Downey-Smith advised the participants to have a sound business plan and good financial management in order to operate a successful business.
The showcase, which was also attended by scores of secondary school students, was organized by the Barbados Youth Business Trust (BYBT) and formed part of Global Entrepreneurship Week.