It is an easy punchline to say negative things about the generation raised in the 60s and 70s, and the collective notion that regular people could impact policy and societal ills. We all know that no assessment is that simple.
A lot of music echoed those themes, and while real life often gets in the way of lofty goals and missions, occasionally there are some battles being waged that do have a positive impact. I am referring specifically to the horrific practice of human trafficking and the strong commitment by AML professionals in both the private and public sectors to attack those lowest forms of humanity who prey on the innocent.
One caveat, as I mention several individuals and organizations deserving credit for exemplary efforts spotlighting the damage that human trafficking causes and how it exists in small towns and big cities.
I know there are many heroic participants in this area. But I can’t name all of you. So don’t worry about credit.
Keep doing your good work.
How human trafficking came under AML light
The issue first came to our attention at ACAMS as a possible AML-related action a few years ago when several banks began working with the Department of Homeland Security to create typologies and “red flags” that could be placed in transaction monitoring systems.
William Langford, then at JPMC and a member of our Advisory Board, recognized the impact human trafficking has on communities. He sought a team of analysts, equally appalled at this crime, to come up with data points that could be shared with the industry at large.
Homeland Security also agreed to the information-sharing aspect and worked closely with the participating banks to produce a number of useful examples of human trafficking transactions.
I would add that, in my view, Homeland Security has been the government leader in the U.S. in educating all parts of the country about this scourge.
Where you find human trafficking
I will leave to others to delve into the public reports and guidance on detecting the financial aspect of human trafficking. But some of the traits we learned from JPMC, Homeland Security, and several other participants in a Human Trafficking Task Force (i.e., Citi, Bank of America, American Express) concerned the types of businesses at risk: travel agencies, labor contractors for caretaker services, and labor at farms, textile manufacturers, nail salons, etc.
Internationally, Europol, the Financial Action Task Force (FATF), and multiple sources confirm that there is an “invisible” sector such as domestic work where there are victims of trafficking. But it also exists in the service sector, construction, retail, manufacturing, mining, fishing, and similar businesses.
Red flags for trafficking
Also, and not surprisingly, we have learned that this area has a wide use of cash and the following:
• Use of multiple bank accounts and credit cards
• Transfers of funds through money service businesses to family members and associates
• Purchase of properties abroad
• Use of alias identities and multiple addresses
FATF has also released a report and analysis of five case studies and highlighted human trafficking indicators such as:
1. Extensive use of cash.
2. Frequent transfers through money remitters to common recipients, often in risk countries.
3. Use of bank accounts with frequently repeated cash payments in and out of the account.
4. Use of front companies.
5. Use of straw persons.
6. Use of cash to invest in real estate/high value goods.
7. Repayments of loans or other debt burdens.
8. Laundering of cash through casinos, import/export trades, etc.
Spread the word, learn the ropes
Anna Rentschler is a former chair of ABA’s Compliance Executive Committee and currently an ACAMS Advisory Board member. She has worked diligently on the local level in Missouri and emphasizes how simple it is to show some common occurrences as potential evidence of human trafficking and how more and more people are ready to help once they know what to look for.
There is much more available to interested parties (ACAMS has a section of our website devoted to this problem) and many experts that are willing to share their findings and recommendations.
FinCEN has provided information on this area and a large number of bankers have consistently asked for more training and general awareness programming as well.
As opposed to mundane money laundering issues, human trafficking appears to bring a strong response for all parties—without the detour (at least now) of regulatory obligations that hamper the ability to stop this madness.
Let’s continue our efforts because “We can make it happen.”
* From “Dialogue (Parts 1 and 2)” written by Robert Lamm (1972) for Chicago. The lyrics are written in two voices—a concerned citizen and a party college student. Which one are you?
- Solving the Community Bank Digital Gap
- Citi Ventures, Woodforest National Bank, and Fifth Third Bank among finalists of the BAI Global Innovation Awards
- The Importance of Transacting an Omnichannel Strategy in Banking
- Bank Marketing Best Practices: Right People. Right Message. Right Time.
- Escape to America: Borrowers Seeking Refuge Through Chapter 11