There was sudden drop in suspicious activity reports to money laundering detectives following the closure of Western Union in October last year, according to the head of the Police Financial Investigation Unit.

In just three months after the Western Union money transfer facility at Capital G Bank closed last October, the number of reports to Police fell by 257 to 2,570, the Second Annual Bermuda Anti-Money Laundering Conference held at Elbow Beach heard yesterday.

Det. Insp. Gary Wilson said the drop was due to the closure of Western Union.

Money transfers are used by local drug traffickers as a way of laundering money which is then brought back into the country at a later date.

In a question and answer session, lawyer Saul Froomkin asked Mr. Wilson why there had been a fall in numbers and if it was related to a reduction in drug trafficking.

Mr. Wilson replied: "It (the drop) was due to the closure of a money transfer facility which closed down in October last year, which coincided with the sudden falls.

"The large and sudden drop in reporting happened then.

"The trend is to use human carriers to change it into US dollars and import it back into Bermuda."

He said he was not going to reveal the name of the facility, but let it slip to the audience that it was Western Union.

He said: "The close of the Western Union coincides with this period."

But when later asked what part his department had in the closure of the facility, Mr. Wilson said: "None. It was purely a business decision of the agent."

At the end of October last year Capital G Bank Ltd. announced it had terminated its agreement for a transfer service with Western Union Financial Services International Ltd, a subsidiary of First Data Corporation. The local bank had used the service to execute US dollar wire transfers for customers.

Det. Insp. Wilson said suspicious activity reports peaked at 2,827 in 2001.

He said: "The figures are high in comparison to other similar jurisdictions, mainly due to the fact that they reflect the suspicious financial activity by local drug traffickers through a local money transmitter."

He said in general the standard of suspicious activity reporting was high in Bermuda and it was a challenge for his unit to handle and investigate such a large number.