Lasco upgrading software to fight lotto scammers

BY STEVEN JACKSON Business reporter jacksons@jamaicaobserver.com

Friday, October 10, 2014    

LASCO Financial, which offers cambio and remittance services, will this month fortify its MoneyGram network with two software upgrades to block lotto scammers and improve its analytics.

It’s the latest remittance company to move against criminals following the much publicised lockdown by rival Western Union in 2012.

“It’s a remittance software done by MoneyGram which allows us to manage Lotto scamming. So it will offer customer relationship management and give us the opportunity to offer loyalty cards as well,” stated Lasco Financial Managing Director Jacinth Hall-Tracey in her address to shareholders at the annual general meeting held September 30 at the Knutsford Court Hotel in Kingston.

Lasco Financial, a primary agent for MoneyGram International in Jamaica, provides a network of 90 sub-agents in Jamaica. It also provides MoneyGram services in five Unicomer Courts Furniture Store branches in Barbados.

“So we are adding two software [programs] in October and I do not know how our staff will manage,” she joked. “[The software] will give timely financials, better analytics, better administration for loans, remittance management and security.”

Remittance inflows into Jamaica totalled US$2 billion (J$220 billion) in 2013 with Lasco Financial’s total revenues at a fraction of that, or J$628 million at its March 2014 year end.

In August 2012, Western Union International ordered its operators in St James to close for two weeks in order to implement anti-lotto

scam security measures. GraceKennedy Money Services holds the Western Union franchise for Jamaica.

In March 2013, Parliament passed the Fraudulent Transactions Act, dubbed the anti-lottery scam bill, aimed at specifically criminalising activities, some of which found loopholes in the law. It was followed by the Proceeds of Crime Act (POCA) passed in October that year.

“The amendments to the POCA last year, if you recall, as individuals you are not allowed to trade with over $1 million in cash with one transaction in 24 hours,” Hall-Tracey reminded the shareholders.

“Unfortunately, when this bill was being passed apparently no one remembered that remittance agents trade in cash and in high volumes of cash. Some banks use their discretion and allow them to get cash to run their business, but for several of them the banks refuse to pay more than $1 million cash and that really affects our business because we really need the funds in cash,”

she said.

The bill exempts banks and licensed financial institutions. However, many of Lasco’s sub-agents, which include supermarkets, would not fall under the supervision of the Bank of Jamaica or Financial Services Commission as financial institutions.

US officials have estimated that at one point lotto scamming fleeced US citizens of US$300 million annually. The US Embassy in Kingston has posted on its website a page highlighting scams from Jamaica.

“The most prevalent in Jamaica is the lottery scam, where scammers lead victims to believe they have won a drawing or lottery, but the cash or prizes will not be released without upfront payment of fees or taxes. Scammers frequently target the elderly or those with disposable income,” stated the Embassy on its website. “If it is too good to be true, it is not true.”

Additional scams originating in Jamaica include US citizens defrauded by Internet and social contacts they thought were their friends or loved ones, stated the embassy.

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Lasco upgrading software to fight lotto scammers

Lasco expanding distribution

LASCO Distributors Limited (LDL) announced plans to increase its warehouse space by roughly one-third to 340,000 square feet (sq ft) which equates to one of the largest in the country.

It will accommodate increased inventory in order to facilitate the plans to double annual sales to $20 billion in three years. It follows the 2012 expansion at the White Marl, St Catherine location. That expansion cost US$25 million.

The latest build-out will focus on the distribution arm of Lasco, while the earlier development dealt with Lasco Manufacturing Limited (LML).

The company remains mum on the cost of the development.

“We are adding 110,000 sq ft of warehouse space only for Lasco Distributors. So it will be 340,000 sq ft of building on eight acres of land. I suspect it will be the largest warehouse of its kind in Jamaica,” said Lascelles Chin, chairman of the three Lasco affiliated companies in his address to shareholders at the annual general meeting (AGM) held at the Knutsford Court Hotel in Kingston yesterday. “They have paved the grounds for the building to start and it will be finished in February next year.”

Lasco aims to double sales by growing existing lines and launching a raft of new products including its new fruit flavoured drink, iCool.

“We talked a lot about the desire of the three companies to increase sales and profits by double in two to three years’ time. If we nearly achieve that it is still great,” he said. “Its ambitious and some of you would call me a madman.”

At the 2013 AGM, Chin initially made the challenge to double profits at the three affiliated companies in three years.

The projection would double LDL profits to roughly $1 billion; LML profits to $1.2 billion and Lasco Financial Limited (LFL) profits to roughly $320 million, based on the 2013 projection.

In 2011, Chin announced plans to double sales in three years for his manufacturing division — LML from $2.9 billion to some $6 billion.

That was dependent on the completion of the factory expansion which was delayed before finally starting in January 2012. Over the period, LML actually increased sales 25 per cent over two years to some $3.7 billion in 2013.

“Our chairman has set out robust targets and certainly we are gearing to meet those targets,” stated LDL managing director Peter Chin in his address at the 2014 AGM yesterday.

The three companies have roughly $8.4 billion in market capitalisation as at September 30. The largest chunk is held through LML with four billion ordinary shares at $0.87, followed by LDL, with 3.3 billion ordinary shares at $1.18, and Lasco Financial Limited with 1.2 billion ordinary shares at $0.87.

Some 100 shareholders attended the meetings, including vocal minority investors Sushil Jain, Orrette Staple and Livingston Young.

Lasco’s three publicly listed companies earned multiples for investors since listing on the Jamaica Stock Exchange Junior Market in 2010.

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Lasco expanding distribution

Privy Council backs Lasco against Pfizer

Lasco Distributors has secured the dismissal of  the appeal brought by U.S. pharmaceutical company, Pfizer, against an award of  S400m it was granted by the lower court.Pfizer went to the UK Privy Council to appeal the ruling. Pfizer’s appeal followed a decision to hand Lasco Distributors an award of  $400m dollars in damages to compensate for lost earnings on a hypertension drug.Lasco was barred from selling the drug for seven years by a court injunction after Pfizer said the company breached its patent on the medication. The court did not agree with Pfizer and awarded compensation to Lasco for lost earnings due to it being barred from selling the drug.The award was upheld by the Court of  Appeal on Pfizer’s appeal and now also by the Privy Council.

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Privy Council backs Lasco against Pfizer

Lasco expects Pfizer face-off in high court by March

LASCO Distributors Limited (LDL) revealed that by next March it will battle pharmaceutical giant Pfizer in the UKbased Privy Council, in order to secure the $400 million in damages awarded to the company in the lower courts.

The amount represents the distribution company’s expected compensation for lost earnings over some seven years in which the sale of blood pressure drug Las Amlodipine was halted by a 2005 injunction issued to Pfizer, which had claimed that Lasco and Medimpex Jamaica used its patent-protected drug, Salts of Amlodipine, in their product.The Supreme Court ruled in favour of Lasco and Medimpex in 2009, and the Court of Appeal dismissed Pfizer’s objections in June last year.Pfizer is appealing the decision at the island’s highest court — the Privy Council.“It is anticipated that the matter should come before the Privy Council either by the end of this year or during the first quarter of next year,” indicated LDL in notes accompanying its annual report released this week to the Jamaica Stock Exchange (JSE).LDL reported year-end net profit of $506.8 million on $8.2 billion in revenues. The award, if maintained, would increase Lasco’s equity base by some 20 per cent from the $1.8 billion reported at its March 2013 year-end.“The attorneys are of the opinion that the company should be successful on this appeal and anticipate that the amount to be recovered by the company may be approximately $400 million,” stated LDL’s 2012 annual report.Jamaica Money Market Brokers, in a July 2013 market research, indicated that the payout could grow to $1billion from Pfizer: “The company stands to improve its results through the distribution of new products (baby formulas, pharmaceutical pills, juices, water, etc) into new markets and Jamaica. The company also stands to benefit from a lawsuit settlement of $1 billion from Pfizer. Following the ruling in the court of appeal, if successful, the company will pay a special dividend to shareholders and use the remainder to improve the overall operations of the company.”A loss at the Privy Council would cost Lasco $25 million plus damages arising from profiting of the sale, stated the LDL annual report.According to records submitted in court, total sales of Medimpex’s product, Normodipine, amounted to approximately $45.2 million between 2001 and 2005, while Lasco’s drug, Las Amlodipine, brought in $24.3 million in revenue between May 2002 and December 2005.Pfizer reportedly sold US$1.2 million of its own product, Norvasc, in Jamaica in 2001, but its revenue fell to US$481,000 in 2002 when the two local companies introduced their hypertension and heart treatment drugs. The exterior of Pfizer in Groton, Connecticut. (PHOTO: AP)

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Lasco expects Pfizer face-off in high court by March