Written by Mackenzie Martinez
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).
Electronic wire transfers allow for the domestic or international relocation of funds between banks or agencies. These relatively easy, highly automated transfers can keep criminal proceeds from being detected and complicate the money trail that could lead back to traffickers. Wire transfers are widely used outside of illegal activities, which works to camouflage illicit actions. Banks and other financial institutions are becoming increasingly aware of “red flag” transactions that are characteristic of money laundering and potential human trafficking.
Case Study: Rock Lobster from South Africa
A 2013 case of smuggled rock lobster from South Africa to the United States reflects a combination of environmental crime, prosecuted under the Lacey Act, with human trafficking. Workers were imported illegally from South Africa to Maine and forced to process the rock lobster that was illegally imported. The exploitation of the trafficked laborers increased the high profits of the seafood smugglers. Millions in proceeds from this crime were wired to an offshore locale.
Money Transfer Businesses
Money transfer businesses were identified early in human trafficking investigations as helping pay for the transportation costs of trafficking victims and compliantly transferring illicit funds. Such organizations allow for the international flow of large sums of money, making them ideal for laundering human trafficking proceeds.
Case Study: Western Union
French parliamentary hearings in 2001 revealed that the transfer of funds within Western Union, an international money transfer corporation, derived from human trafficking. The problem did not end then. The Department of Financial Services in New York alleged that “senior Western Union executives and managers ignored suspicious transactions to Chinese Western Union locations by several high-volume agents, including money transfers linked to human trafficking.” This resulted in a $60 million fine paid by Western Union in 2018. The problem of wire transfer businesses moving the proceeds of human trafficking is not confined to Western Union. Moneygram was also involved in transferring money for a criminal gang in a prominent Southern California case.
This blog series has provided a brief overview of the ways in which human traffickers utilize existing economic systems to facilitate their crimes. Though we have uncovered many economic mechanisms of human trafficking, there is still much to be learned about how to best identify, intervene, and shut down trafficking networks. For now, businesses should exercise their corporate social responsibility and actively seek ways to combat human trafficking where they can. ATII has many free tools and resources that can help train companies to detect potential trafficking activity and ultimately follow the money to fight slavery. A thorough list of transactional red flags that financial institutions can use to detect human trafficking activity can be found here (link).