Caribbean News

Government uncovers fraud involving local companies

The Government has uncovered a massive defrauding scheme by businesses whose workers are listed to benefit from the payroll support component of the COVID-19 stimulus package.

According to reports, the discrepancies have led to delays in the processing of applications and payment.

“The discrepancies have resulted in delays in the processing of applications and this led to the addition of another layer of validation to the verification process” said a news release issued by the Press Secretary in the Office of the Prime Minister.

“Among the anomalies identified are the inclusion of service charge as part of the payroll support claim; submitted data not matching records at the National Insurance Scheme and misrepresentation of the salaries of senior and management level staff to make them eligible for stimulus payments, despite being expressly excluded from the benefit,” said the release which did not name any specific business within the Hospitality sector.

Sharing more details of the defrauding scheme, the release said that some businesses have also submitted inflated salaries for employees but have actually remitted a smaller amount to them. “Employees have also reported to the secretariat that some employers have paid them less than the 40% of salary provided for in the stimulus package for disbursement to approved applicants.”

The validation process has also confirmed that some entities have not paid the National Insurance Scheme for their employees since 2019 although employee records show deductions being made from their salaries.

 “This caused further delays in verification of employee information provided by employers. Employers are reminded that misuse of any funds paid in the stimulus package meant to be for the benefit of employees, warrants forthwith repayment to the Government, if the funds are not used for the intended purpose,” the release stated.

The Office of the Prime Minister said the violations are causing much concern for the secretariat as it appears to be quite pervasive, with numerous businesses attempting to defraud the system.

“In one instance, more than 100 employees at a single establishment were affected by discrepancies uncovered during the processing and validation of applications.”

The strongly-worded release said that the COVID-19 Economic Support Secretariat and by extension, the Ministry of Finance is calling on employers to desist from the unlawful practice.

“It is not only unfair to employees who are already hard hit by the impact of the pandemic, but it also creates an unnecessary burden for the COVID-19 Economic Support Secretariat to create additional layers of verification, a factor which subsequently causes delays in processing,” said the release.

The Stimulus Package was announced in March when the country went into lockdown after the Government declared a state of emergency as part of measures to contain the spread of COVID-19.

The Parliament approved EC$50 million for use in the package but EC$20 million was assigned as payroll support for workers in the hospitality and other sectors who are directly affected by the lockdown.

The workers are to receive 40 per cent of payroll support. \In a national address on June 28, Prime Minister Dr. Keith Mitchell said that more than 4000 persons have already benefited from the payroll support of the package.


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