Anti-money laundering (AML) vendors are tweaking their systems to spot suspicious activity pegged to human trafficking while the government continues to promote more awareness of the crime by informing banks and their vendors of its telltale signs.
While the numbers are controversial-it's basically impossible to attain an accurate count when so few report the crime-the U.N estimates that human trafficking represents a $32 billion annual global trade that, according to the U.S. State Department, forces 12.3 million adults and children into slave labor or prostitution. Some experts say trafficking involving the sex trade is one of the fastest growing criminal enterprises.
Governments have therefore tried to help both AML vendors and banks spot potential human trafficking patterns in the money nexus to aid in stemming the crime and in prosecuting its alleged purveyors.
Project STAMP, launched a year ago by U.S. Immigrations and Customs Enforcement (ICE), aims to "assist financial institutions in developing the typologies necessary to proactively target and report on [human trafficking and smuggling] organizations attempting to launder their illicit proceeds."
ICE says banks should be particularly aware of multiple financial transactions structured under $3,000 on the same day at money service businesses (MSBs), a pattern in which traffickers have been known to engage. MSBs are often bank customers. Angie Salazar, a special agent and national program manager in ICE's human smuggling and trafficking unit, said in January during a Web seminar sponsored by the Association of Certified Anti-Money Laundering Specialists (ACAMS) that banks should watch for "round number payments tied to spas or massage parlors."
AML solution providers like Fiserv, NICE (Actimize), Oracle (Mantas) and SAS have added people, companies and behaviors the government says are associated with human trafficking to watch list filters that cross-check the data against banks' customer accounts.
Tony Wicks, director of AML Solutions at NICE Actimize, says several customers in California and Europe used Actimize's pattern analysis several years ago to pinpoint unusual customer account behaviors, which were later pegged to human trafficking.
Jeroen Dekker, product manager of financial crime risk management solutions at Fiserv, cautions that AML software detects only "money laundering patterns, not the underlying predicate offenses," though tools like Fiserv's screen transaction counterparties against trafficking typologies and entities.
Cameron Jones, director of product management at SAS Institute's fraud and financial crimes practice, says scrutiny should be applied to "high-risk countries like Mexico and Eastern Europe, escort and labor services, travel agencies, landscaping companies, nail salons, money remittances, and cross-border, low dollar wires." Jones says "a large North American bank" has used SAS AML monitoring "to detect behavior synonymous with human trafficking."
