Special ACFCS Contributor Report: Banks Have a Moral Obligation to Fight Human Trafficking – CFCS


The trafficker toolkit: kidnapping, coercion, exploitive employment, chat apps

Traffickers ply their trade by kidnapping their victims, coercing them into drug addiction, ‘sextorting’ them with compromising photos, and duping them into exploitative employment arrangements.

Unlike the brothel-laden backstreets of Southeast Asia, Eastern Europe, and Latin America, however, America’s sexual slavery epidemic largely proliferates online via escort sites, dating apps, and even popular social media apps like Snapchat, WeChat, and Instagram.

Around the world, sex traffickers are prone to leaving digital clues on social media posts and classified ads that market their victims.

Thus, when investigated properly and with the right technology, these online platforms can yield a trove of web intelligence (WEBINT) and financial intelligence (FinTel) for investigators.

When combatting trafficking, the disciplines of WEBINT and FinTel frequently overlap because street-level traffickers are not the brightest and have the tendency of flaunting their criminal lifestyles and purchasing behavior on social media, according to HT experts.

FinCEN’s groundbreaking guidance empowers customer-facing staff and AML departments at financial firms with four new typologies and 10 updated “financial red flag indicators” to spot signs of HT and help law enforcement catch the worst kind of predators, who frequently exploit children as well.

 These typologies include front companies, exploitative employment practices, funnel accounts, and alternative payment methods.

“Human traffickers routinely establish and use front companies, sometimes legal entities, to hide the true nature of a business, and its illicit activities, owners, and associates,” notes FinCEN.

The Treasury’s financial intelligence unit also writes that HT front establishments typically appear “legitimate with registrations and licenses.”

Frequently, these “establishments will appear to be a single storefront, yet are part of a larger network.”

The laundering shell game: Swimming together crypto, P2P exchanges, prepaid cards

Meanwhile, in one unusually sophisticated HT investigation, evidence mined from the forensic extraction of a gang member’s phone “revealed that the group’s illicit activity revolved around the purchase of Vanilla Visa prepaid credit cards, which were then used to purchase bitcoin on the Paxful virtual currency exchange.”

 With this person-to-person or P2P-sourced crypto, which was much more difficult to trace prior to Western authorities’ crackdown on AML Know Your Customer (KYC) gaps, gang members purchased prostitution ads on the now-defunct Backpage website.

This sophisticated laundering tradecraft virtually masked the gangsters’ online footprints and would have stifled blockchain analysis, had HSI investigators not seized and cracked a key co-conspirators’ cell phone.  

From an intelligence standpoint, two of FinCEN’s updated financial indicators are also particularly relevant.

In the first case, FinCEN advises that AML analysts should be suspicious of customers who “frequently appear to move through, and transact from, different geographic locations in the United States.”

AML investigators should cross-reference customers that exhibit this behavior with “with travel and transactions in and to foreign countries that are significant conduits for human trafficking,” advises FinCEN.

Secondly, FinCEN highlights how HT networks will frequently reuse common identifiers.

The watchdog advises AML staff to be vigilant for customer accounts that share common contact data inputs, “such as a telephone number, email, and social media handle, or address, associated with escort agency websites and commercial sex advertisements.”

Faced with this unfathomable evil and new FinCEN guidelines, investigators have turned to Web Intelligence (WEBINT) technologies, which were once exclusive to government agencies, to turn the tables on traffickers.

Specifically, WEBINT can identify trafficker’s patterns and behaviors through social media and other channels publicly available to online investigators.

 Notably, FinCEN has highlighted a new field (SAR Field 38(h)) in their suspicious activity reporting (SAR) template designated specifically for “human trafficking,” and advises covered institutions to include key digital identifiers such as “email addresses, phone numbers, and IP addresses” in SARs where sex trafficking is suspected.

Beyond the surface web, which consists of standard web queries on browser engines like Google, and the deep web that comprises chatter on social media and various peer-to-peer forums, WEBINT tools extend beyond the reach of commercial search engines into the ‘dark.’

Still, the vast majority of HT activity is transpiring on the surface and on popular social apps that comprise the deep web.

WEBINT also has power to identity those exploiting children for profit

Beyond hunting and grooming young and vulnerable victims on popular social media platforms, the April 2019 arrest of a Belgian tourist in Australia, who bankrolled his holiday via the sale of child sex abuse material, illustrates the power of next-generation WEBINT analytics.

Thanks to a tip from the U.S.-based National Centre for Missing and Exploitation Children, the Australian Federal Police discovered that this tourist was advertising a website he administered and that was involved in the sale of child abuse material on various social apps, including Tumblr, Snapchat, and Instagram.

The man pleaded guilty in an Australian district court last month. He is also the first offender convicted of child exploitation offenses to have his assets seized by the AFP’s Criminal Assets Confiscation Taskforce (CACT).

The CACT managed to seize roughly $30,000 from two bank accounts in Australia and Germany and from the child abuser’s personal property.   

In a fluid, digital HT economy, where traffickers regularly migrate to new escort sites, online “hobbyist” forums, and mobile dating apps, next-generation WEBINT tools engineered to target static online classified websites like Backpage have become obsolete. 

Like fraud in a digital age, more human trafficking groups becoming ‘cyber-enabled’

Fortunately, WEBINT technology has evolved to combat the next generation of cyber-enabled sex trafficking.

In the context of FinCEN’s elevated counter-HT regime, placing law-enforcement-grade intelligence collection tools in the hands of financial crime fighters in the private sector can thus optimize the detection and reporting of digital identifiers linked to traffickers, and enable banks to stand on the front lines in the battle against their evil trade.


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