In today's column I want to tell them how we in Puerto Rico counter fraud represented a serious problem for financial institutions and as an effective means to counter this evil model was developed.

by Hector R. Torres, PhD, MBA, CPP, CFE, CHS *

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Fraternal greetings from Puerto Rico to all colleagues and readers of this column. It is a pleasure to share with you again.

This model arose from the great need faced by all financial institutions in Puerto Rico at the beginning of Century 21. To combat financial fraud, the emphasis should be focused on a composite of three components simultaneously executed strategy; based education fraud; early detection schemes and coordination of research efforts. The first two assumptions were met, however there was no coordination of efforts among financial institutions to fight fraud together.

Background Problem

By then it was estimated that the institutions in Puerto Rico lost between 40 60 billion dollars a year by way of financial fraud and this estimate was considered a very conservative.

Financial fraud schemes involving fraud debit / credit checks, opening bank accounts, mortgages and car loans.

Each passing year has increased more fraud and combat it seemed that it was impossible because there were well-organized criminal gangs who dedicated solely to carry out these frauds.

While all institutions in Puerto Rico competed fiercely to increase their portfolios and markets, the truth was facing the same great threat to havoc with your winnings. Among the institutions there was a concerted and united way to combat this evil. Some contributing factors and worsened the situation included:

  • Lack of management support for initiatives of corporate security institutions to combat fraud. Senior management in many institutions thought they should not invest time, effort or money to a problem that was not a priority and that it was a temporary phenomenon.

  • The lack of exchange of information on fraud schemes and on individuals or gangs who committed schemes between institutions. Many institutions thought they could not or should not exchange information which owned.

  • The lack of support and coordination between institutions in investigations of fraud. Many institutions did not want to let their rivals know as were their losses on fraud much less admit that they had such losses.

  • The lack of support and coordination between institutions with agencies of law and order. All institutions sought to coordinate their fraud cases with the agencies of law and order independently. The result of these efforts were multiple investigations by these agencies against the same bargain or fraud scheme where time and resources are lost.

  • The limited research capacity of some institutions due to lack of resources and technology. Many institutions had serious limitations in terms of resources and technology available to conduct fraud investigations.

collective effort and the birth of a paradigm

During the month of November 2001, Arturo L. Carrion, executive vice president of the Association of Banks of Puerto Rico, I will call a special meeting with the Security Committee composed of the heads of security of all the major financial institutions of the island with the to develop an operational concept to combat rampant financial fraud.

After a very long meeting was achieved conceptualizing a new paradigm to collectively combat financial fraud in Puerto Rico. Based on this meeting, the Puerto Rico Financial Crimes Task Force was founded in December 2001. The purpose and objectives of this group are listed below:

Unify efforts between the Association of Banks of Puerto Rico, financial institutions, private corporations and state and federal law enforcement agencies to detect, identify, stop and avoid fraud schemes directed towards financial institutions.

  1. Exchange and analysis of information on fraud schemes.

  2. Prioritization in the cases investigated.

  3. Continuous training to members of the Group on research methods and new schemes.

  4. professional preparation of cases to undergo state and federal prosecutors.

  5. Development of a Bank of intelligence about the different schemes, methodology, criminal gangs and criminals.

To carry out the objectives, the operational concept of this group is based on the following premises:

  1. Group members representing financial institutions, private corporations and state and federal law enforcement agencies meet twice every month to share and analyze information related to the schemes and frauds.

  2. research efforts to prosecute and prosecute offenders involved in the schemes are coordinated.

  3. The integration of security technology and information systems to maintain databases and criminal schemes in order to speed up the research process and the clarification of cases.

  4. Establish an early warning system aimed at informing all institutions on identification of fraud schemes, people, bargains, methodology and geographical areas of operations.

Since its inception, the Puerto Rico Financial Crimes Task Force It has been listed as a resounding success. This working model achievement significantly lower incidences of cases and fraud losses, improved collaboration among financial institutions, achieving the rapid dissemination of information related to fraud schemes and improved our joint work with the agencies of law and order in the island to prosecute the criminals involved in these schemes.

In conclusion

Fraud financial institutions continue to be a threat because of how lucrative this type of crime. Ignorance of the threat, the lack of early detection methods, and lack of coordination of research efforts aim to encourage increased cases of financial fraud.

To deal with this threat successfully, we must unite and focus efforts among financial institutions, private corporations and law enforcement agencies. The Puerto Rico Financial Crimes Task Force manages to become a good model to emulate in countries facing the threat of financial fraud.

I invite you to continue sharing your ideas and concerns of the world and security management.

A hug and see you soon!

* If you want to contact the author of this article write to

Santiago Jaramillo
Author: Santiago Jaramillo
Social communicator and journalist with more than 15 years of experience in specialized digital and print media for Latin America. Currently Editor of the Security Sales, Building Management and Academic Coordinator of the TecnoEdificios Congress.


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