Big banks join forces to fight human trafficking

by Tim Large | @timothylarge | Thomson Reuters Foundation
Thursday, 25 April 2013 21:11 GMT

Anca, a former Romanian sex slave, hides her face behind a poster in Bucharest in this December 1, 2006 file picture. REUTERS/Bogdan Cristel

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Major international banks pledge to work together to uncover the "financial fingerprints" of trafficking and slavery

NEW YORK (Thomson Reuters Foundation) – In one case, police rescued girls enslaved in brothels masquerading as nail salons. In another, investigators traced traffickers’ every step as they hauled their human cargo across the New York state line.

Both crimes had one thing in common – the perpetrators left telltale clues among the hundreds of millions of financial transactions that oil the banking industry each day: a credit card swipe here, an ATM withdrawal there, checks written and received.

“All sorts of electronic and digital fingerprints are left when you have a crime committed or a business enterprise is being run,” said Manhattan District Attorney Cyrus Vance.

“Trafficking at its heart is a crime motivated by money, and we have seen over the course of our prosecutions that there is much to be made. Financial institutions are in a unique position to spot red flags in banking activity and report them to law enforcement.”

Thomson Reuters Foundation and the Manhattan District Attorney co-chaired on Thursday an unprecedented gathering of major financial institutions and law enforcement agencies to discuss how to join forces to do just that.

The roundtable explored ways to identify irregularities in financial transactions by potential traffickers, share technical expertise and find cross-border solutions to fight a global criminal enterprise the U.S. State Department reckons to be worth $32 billion a year.

JP Morgan Chase, Citigroup, Bank of America, Wells Fargo, TD Bank, Barclays, Western Union and American Express established a working group to fight trafficking, under the coordination of the Manhattan D.A.’s office and the Thomson Reuters Foundation.

The group will next meet  in early July.

“It’s critical to identify trends and patterns that might be indicative of suspicious activities, which include human trafficking, and that we look at the data collectively to identify anomalies in transactions that might contain elements of trafficking,” said Marcy Forman, managing director and head of Citigroup’s Global Investigations Unit.

Daniel Wager, head of global anti-money laundering at TD Bank, said one key was to look for activity outside the norm for an industry or business.

“For example, a nail salon which engages in transaction amounts or transactions at times of day which are highly unusual for that business type could be indicative of illicit activity or even human trafficking,” he said.

“A $300 manicure at 3 a.m. would be highly unusual and indicative of something other than typical nail services.”


The International Labor Organisation (ILO) estimates almost 21 million people worldwide are victims of slavery or forced labor. Almost half are thought to be trafficked, either across borders or within their own countries.

Between 14,000 and 17,500 people are trafficked into the United States each year, the Manhattan DA’s Office said, while tens of thousands of people born in the country are at risk of sexual exploitation.

Earlier this month, a convicted human trafficker was sentenced to 50 years in prison for operating a sex trafficking ring out of his Upper East Side apartment in Manhattan.

While such cases grab headlines, ILO data suggests the majority of trafficking victims – about 7 million people worldwide – are enslaved outside the sex trade: in private homes as servants and nannies or working in factories, farms and textile mills.

U.S. and European financial institutions already have a regulatory duty to report suspected illegal activity, but until now there have been few efforts to leverage methods used to spot money laundering, extremist violence and other crimes to hone in on human trafficking.

The first bank to do so was JP Morgan Chase, which on Thursday offered to share with the other financial institutions in the working group its model for monitoring transactions and partnering with law enforcement.

Martina Vandenberg, president of the Washington-based Pro Bono Legal Center, which assists with criminal and civil cases against traffickers, welcomed the initiative as an important new weapon in prosecutors’ armories.

"We have never before bridged this idea of financial crime and human trafficking,” she said. “Bringing these two worlds together will, I think, only increase the number of trafficking prosecutions that we see in the United States and also around the world."

She added that one of the hardest parts of building a case was developing evidence that doesn’t rely solely on testimony from often-traumatized trafficking victims.

“It’s very difficult for them to be stable enough that they can fully cooperate in a prosecution,” she said. “So if your evidence is the victim, then your evidence is only as strong as the victim.”

Vandenberg offered to bring organizations working with victims into the working group, to help investigators understand how the traffickers operate.

Benjamin Skinner, an investigative journalist and expert in modern day slavery, said getting banks involved could help “turn the corner” in the fight against trafficking.

“One of the key steps, however, is for those actors in the financial services sector to evaluate their own portfolio companies, to look at those entities that they invest in, to make sure that there’s no slavery anywhere in the supply chains of those companies,” he said.

Trust in financial institutions has been eroded by scandals including the rigging of benchmark interest rates, lapses in anti-money laundering controls, breaches of U.S. sanctions against Iran and various mis-selling controversies.

Thursday’s roundtable was a follow-up action to Trust Women, an international conference on women’s rights organized by the Thomson Reuters Foundation and the International Herald Tribune in London in December.

“The commitments taken today by the financial industry represent a huge step forward in using innovation and shared knowledge to attack human trafficking,” said Monique Villa, CEO of Thomson Reuters Foundation.

(Additional reporting by Stella Dawson and Lisa Anderson)

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