Howard Spieler, CAMS, CFE, ACAMS New York Chapter Co-Chair
Nishi Gupta, Vice President, GFCC Data Capabilities & Intelligence, American Express
Angel Swift, Vice President, Compliance and Financial Crime Solutions at Enigma Technologies, Inc.
Bonnie Goldblatt, Director, Global Investigations Unit, AML Compliance, Citigroup
As January is National Slavery and Human Trafficking Prevention Month the ACAMS New York chapter has joined with advocates, organizations and individuals united under the banner of raising awareness about the issue of slavery and human trafficking in the hopes of stemming the tide of this horrific crime.
In support of this goal the ACAMS New York Chapter, along with our event co-sponsor - the Director for the Center for Professional Accounting Practices at Fordham University, organized a panel of distinguished professionals for a spirited and interactive discussion regarding specific methods financial institutions can employ to detect, and help prevent, human trafficking.
During this important session our panel discussed:
Specific scenarios and typologies for transaction monitoring systems in order to better detect human trafficking;
Solutions that can help identity red flags which may lead to human trafficking activity; and
Examples of real cases and investigations which were aided by information provided by analysts and investigators at financial institutions.
Human trafficking involves the use of force, fraud or coercion for the purposes of control. This aspect of control can come in several forms - perceived threats or actual physical harm, false promises, inescapable indebtedness, etc. and can result in Sex Trafficking, Child Exploitation, Forced Labor or other heinous crimes. This problem is so pervasive that it enslaved approximately 40.3 million people worldwide, 81% of whom are trapped in forced labor, 25% are children, 75% are women and girls, and generates an estimated Business value of US $150 billion annually. In the US alone more than 8,500 cases of human trafficking were reported in 2017, representing a 17% increase from the prior year.
While the size, scope and growth of this problem can seem overwhelming the panel detailed how financial institutions can use the tools at their disposal to aid the detection of this activity.
The panelists summarized the process of detecting, and ultimately preventing human trafficking through 3 key steps:
Know – awareness through case studies
Through knowing how traffickers run their operations we can begin to understand how they might exploit the financial system to legitimize their ill-gotten gains.
By bringing this issue out of the darkness and into the light we take the first step towards righting this societal wrong
Do – tools, technology and data – using what’s available
Utilizing systems, processes, and partnerships available to financial institutions to extract the most value from internal and external data assets and identify suspicious transaction patterns
Developing true intelligence through partnerships and collaboration with all relevant internal and external stakeholders
Change – be a part of the larger solution
Developing a community of committed individuals and organizations across the public and private domains is key to driving change and stymying the continued growth of human trafficking operations
Making the most of these public and private resources, specifically data, can deliver the insights needed to support these efforts.
Examples of specific steps financial institutions can take to identify human trafficking transaction patterns within their systems are:
Review specific business sectors likely to be avenues of abuse, e.g. spas, agriculture, nightclubs, etc.
Focus on financial products typically used by traffickers – credit cards, ATMs, cross border wire transfers, etc.
Educate branch staff on in-person indicators
Exhibits fear or anxiety
Exhibits signs that their movements are being controlled
Passport or other travel or identity documents are in the possession of an accompanying party
Allow others to speak for them when addressed directly
Act is if they are following instructions from someone else
Associated with a high-risk industry likely to be used for exploitation
Unfamiliar with the local language or their home or work address
Partner with law enforcement and non-government entities to obtain relevant information, e.g. H2-A Visas for migrant workers in agriculture
Collaborate with industry peers to discuss trends and identify red flags to develop emerging typologies
Utilizing regulatory mechanisms, e.g. 314(b) to share information between financial institutions to identify and report suspected activity
The speakers also noted that financial institutions can monitor customer transactions for patterns that are indicative of trafficking. Trends and patterns pertaining to the flow of money to and from financial institutions include:
Transactions outside of normal business hours for the merchant – indicative of other potential activity occurring within the business
Multiple credit card swipes with no corresponding charge at hotels – potential incidentals hold with cash payment
Frequent ATM/credit card transactions between 10pm – 6am
Card payments to online escort services (for advertising, etc.)
Multiple ride share purchases to and from destinations other than the account owner’s – potential escort service
While the panel discussed actionable steps institutions can take to identify human trafficking within their organizations, and further detailed specific patterns of transactions that may indicate potential human trafficking activity, the underlying theme of the presentation was a community of committed individuals focusing on the same mission. Below are links to information and resources to foster the development of this community and the advancement of efforts to put an end to these crimes.
Resources and studies on data that can be used for developing transaction monitoring, KYC screening, and investigations
Combat Trafficking in Agriculture with Public Data
Technology Initiatives focused on anti-trafficking efforts in FIs
List of current resources for HT Typologies/Indicators
Anti-Trafficking Maturity Model
Developed by the STAT Advisory Team and Soft Launch User Group to help financial institutions determine the maturity of their ant-trafficking efforts. Includes different stages along with mapped resources to help financial institutions expand their programs.
Event Materials: Human Trafficking