How Human Traffickers Exploit International Economics: Underground Banking and Cash Movement (Part 1 of 4)

Written by Mackenzie Martinez

The rise of the cyber world since 2000 has vastly altered the global financial system, causing a major shift towards online economics. Sadly, the expansion of web-based economics has enabled a variety of human trafficking tactics that allow crimes to proceed virtually unnoticed. New and developing methods for facilitating trafficking have resulted in the growth of profits and criminal networks.

This blog series dives into the many avenues traffickers follow to hide their crimes and highlights criminal cases that illustrate such efforts. Some methods have long been utilized, while others are just beginning to emerge. Understanding how human traffickers exploit international economics will help inform how we can most effectively follow the money to fight slavery. All the information from his blog series comes from Louise Shelley’s “Human Trafficking and the International Financial System,” which can be found here (link).

Underground Banking

            Underground banking encompasses all informal banking transactions, and though it is legal in most countries, it is recognized as a suitable mechanism for money laundering. By definition, it includes money transfers that lack any physical movement of money, which make it extremely difficult to follow. This form of banking dates back as far as the Tang Dynasty in China (618-907 AD), and its deep historical roots aid in facilitating illegal activity today.

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            Case Study: Human Smuggling and Trafficking from China

Two decades ago, a large Chinese network engaged in both human smuggling and human trafficking. The individuals moved by this criminal ring were placed in over 400 legitimate businesses in the Washington, DC area and more in New York City. Their work contributed to the profits of restaurants, take-outs and other businesses. The combined smuggling-trafficking ring also made money directly from the people they moved and deposited this money in banks.

After arresting one of the ring members, law enforcement did not move quickly to freeze the accounts of the traffickers, and consequently $60 million was moved back to China rapidly through underground banking. Other smuggling and trafficking operations involving China also use underground banking to repatriate profits.

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Cash Movement

Unlike the majority of economic exploitation methods discussed in this blog series, cash movement does not rely on online economics. Traffickers smuggle bulk cash between countries to be kept off the radar of law enforcement, as harboring such sums of cash could trigger an investigation. Cash can be smuggled in a variety of ways, and those being trafficked can be employed as “mules” to do the smuggling themselves, as seen in the following case study.

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            Case Study: Netherlands Trafficking Ring and Turkey

            One of the largest Dutch investigations of a trafficking ring operating in the Netherlands found at least 120 women being forced into prostitution. In addition to being sex trafficked, the criminals used the victims as couriers of cash back to Turkey to hide the economics of their criminal activity. The money was then invested in nightclubs and bars in the resort community of Antalya, Turkey.

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This blog post detailed how human traffickers utilize underground banking and cash movement to facilitate their crimes. These methods have existed for a very long time, and will continue to play a role in enabling trafficking internationally. The next post dives into the use of cryptocurrency, banks, and credit cards for trafficking activity.