Following the Money, Straight to Human Traffickers

The banking industry has started to crack down on traffickers who use their banks, credit cards, and financial institutions to house and transport their illicit profits.

In April of 2013 the Manhattan District Attorney’s Office and the Thomson Reuters Foundation launched the Banker’s Alliance Against Human Trafficking, bringing government and civil society together to develop a plan for investigating irregularities in financial transactions by potential traffickers. This is a collaborative approach for law enforcement and financial institutions to follow the paper trails to attack the business side of human trafficking.

Much like other kinds of organized crime, human traffickers use shell companies and mix legitimate and illicit funds. The government also took steps in 2014 when the Financial Crimes Enforcement Network published guidelines for banks about the role they should play in identifying and reporting financial transactions that involve human trafficking. Tracking the paper trails helps lead law enforcement directly to perpetrators of this crime.

We first saw individual financial groups working to curb their role in human trafficking in 2015 when three major American credit card companies stopped allowing customers to use their cards to purchase adult ads on, a controversial classifieds site known to sell sex with underage children and victims of trafficking. While their due diligence does not solve the problem, it makes access more difficult.

U.S. legislation maintains that websites are not responsible for third-party content, so these credit card companies’ policy marks a rare victory for law enforcement and victim services groups advocating for Backpage to stop its illegal activity.

In a recent investigation, financial investigation uncovered a trafficking ring that took advantage of nine banks and 50 bank accounts, moving money in and out of the United States and funneling funds through a series of shell corporations. In all, it resulted in $2.5 million subject to forfeiture in 42 bank accounts, real properties, and vehicle purchases. According to the United Nations Office on Drugs and Crime (UNODC), managing an organized trafficking network would be virtually impossible without creating a trail. Financial investigation coupled with law enforcement can trace and stop trafficking sooner.

That’s why the United States should elevate the role of the Department of Treasury in the effort to combat modern slavery. Specifically, the U.S. government should include the Department of Treasury in the President’s Interagency Task Force to Monitor and Combat Trafficking and partner with other banking agencies to identify successful strategies to target human trafficking cases through anti-money laundering investigations.

To lead in in the fight against trafficking, the Department of Treasury should identify successful programs that already exist, recommend changes to procedural and control policies, and require employee training. By creating a formal process for financial investigations into trafficking, the Department of Treasury would be able to make recommendations to replicate those efforts through the industry and could partner with the Department of Justice to report the number of human trafficking-related money laundering cases investigated and prosecuted.

As with most efforts to identify and punish traffickers, the promising efforts from the financial industry require coordination between federal and local law enforcement, non-profit organizations, and banks, which can be hard to institute and create. Challenges aside, employing the same financial institutions that traffickers use to store and move their illicit profits may become a highly effective way of dismantling the lucrative business of human trafficking, and the U.S. government should pursue it.


Published on April 3, 2017


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