Fraud and Money Laundering in Latin American Insurance Companies: A Growing Threat
Fraud and Money Laundering in Latin American Insurance Companies: A Growing Threat
In recent years, fraud and money laundering have become critical threats to the insurance sector in Latin America. According to the latest report from GAFILAT (Financial Action Task Force of Latin America), financial crimes are evolving rapidly, with increasingly sophisticated typologies and methods.
Statistics and Notable Cases (2022–2023)
Predicate offenses: drug trafficking, corruption, fraud, smuggling, and tax crimes are the main offenses fueling money laundering.
Common typologies: use of front men, fictitious legal structures, and illicit transportation of money.
Most commonly used financial products: bank accounts, cash, local transfers, and checks.
Although the banking sector remains the most vulnerable, insurance companies are increasingly exposed, particularly due to their role in managing large sums of money and their interaction with multiple economic actors.
Internal Fraud: The Achilles’ Heel
This type of fraud not only results in financial losses but also erodes public and regulatory trust, weakening the integrity of the financial system.
High-Impact Regional Cases
The GAFILAT report also highlights real cases in which insurance companies were used as vehicles to launder money derived from corruption and drug trafficking. In several of these cases, the use of complex corporate structures and front men was identified, as well as the involvement of Politically Exposed Persons (PEPs).
Insurance companies must strengthen their systems for preventing, detecting, and reporting suspicious activities.
This includes:
- Ongoing staff training.
- Implementation of data analysis and transaction monitoring technologies.
- Strengthening of internal controls and independent audits.
- Active collaboration with authorities and international organizations.
The risk is real and growing. Inaction can turn insurance companies into either unwitting —or even deliberate— accomplices of criminal networks that threaten the economic and social stability of the region.
What Do These Charts Show?
Predicate offenses for money laundering: Identifies the most common crimes affecting insurance companies, such as fraud and corruption.
Most vulnerable insurance products: Life and health insurance are the most commonly used for laundering activities due to their flexibility and the amounts involved.
Internal fraud: 70% of detected cases involve the participation of insurance company employees or executives.
Evolution of cases (2020–2023): A steady increase in reports is observed, which may reflect both a real rise in cases and improved detection mechanisms.
Cases presented in the region with high media impact involving insurance companies.
Seguros Sucre (Ecuador)
Year: 2021–2023
Crime: Corruption and money laundering
Details:
This state-owned insurance company was liquidated following multiple allegations of corruption, bribery, and rigged contracts. It was discovered that high-ranking officials received illicit payments in exchange for awarding insurance contracts to specific companies.
Media coverage:
Widely reported by outlets such as El Universo and Primicias.ec.
Interbolsa and Allianz (Colombia)
Year: 2012–2023 (with recent repercussions)
Crime: Money laundering and market manipulation
Details:
Although the case focused on the brokerage firm Interbolsa, the involvement of insurance companies like Allianz was investigated in the purchase of bonds and financial products used to conceal illicit funds.
Media coverage:
Semana, El Tiempo, and La República.
Video:
Documentaries and analyses available on Semana TV.
Metastasis (Ecuador)
Year: 2023
Crime: Money laundering and judicial corruption
Connection to insurance companies:
The use of life and health insurance policies is being investigated as a means to justify illicit income by judicial officials and drug traffickers.
Media coverage:
Attorney General’s Office, El Comercio.
Video:
Coverage available on Teleamazonas.
Autor
Oscar Eduardo Camelo Montoya
Marketing Leader of Sentinel
We recommend you
What is the true cost of a fraud prevention or AML solution?
What is the true cost of a fraud prevention or AML solution? What no one tells you Some tech decisions seem simple at first… until their true costs start to surface. When it comes to anti-fraud and anti-money laundering (AML) software, it’s easy to be guided by the...
Financial crime in Colombia
Fraud and Money Laundering in ColombiaFinancial crime in Colombia represents a significant threat to economic stability and the integrity of the financial system. Two of the main problems in this area are money laundering and financial fraud. Below, we analyze these...
Sentinel 7.12 More Efficient Than Ever
Discover the New Version of Sentinel 7.12 We are committed to the continuous improvement of our solutions to provide financial institutions with increasingly robust and efficient tools for fraud and money laundering prevention. We are pleased to announce the launch of...
© 2024 Sentinel. All rights reserved.
