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BSA Reporting – Human Trafficking Red Flags
Wednesday, December 28, 2016 6:50 AM

Human trafficking is one of the fastest growing crimes. Because credit unions are on the front lines of the financial system, we can help combat this growing problem by not only reporting suspicious activity that may indicate this crime is taking place, but also offer law enforcement early indicators of new trends in methods being used by criminals.

Human Trafficking: The act of recruiting, harboring, transporting, providing, or obtaining a person for forced labor or commercial sex acts through the use of force, fraud, or coercion.

According to federal law enforcement reports, victims of human trafficking come from all walks of life and are entrapped in many different settings. Anyone can be a victim, regardless of their race, color, national origin, disability, religion, age, gender, sexual orientation, gender identity, socioeconomic status, or citizenship status. While there is no defining characteristic that all victims share, traffickers frequently prey on individuals who are poor, vulnerable, living in an unsafe situation, or are in search of a better life. Many children and teenagers fit these characteristics. These victims are deceived by false promises of love, a good job, or a stable life and are lured into situations where they are forced to work under deplorable conditions with little or no pay. Whether made to work in agriculture, a factory, or a strip club, forced into commercial sex, or abused in a home as a domestic servant, federal law recognizes these individuals as victims of human trafficking.

Traffickers are similarly diverse. There are traffickers working alone to deceive and prey on victims; businesses that enslave their workers; families who have been in the business of human trafficking for generations or have just begun exploiting a family member; criminal networks; and front businesses that appear legitimate at first glance but disguise human trafficking.

Federal law enforcement agencies have identified several financial activities and patterns that may indicate that an individual or business is involved with human trafficking, and have urged all financial institutions to be aware of and report these red flags:

  • Credit and debit processing for even dollar amounts, when such amounts are atypical for the type of business;
  • Multiple accounts established for different businesses, but having persons with the same signatory powers on each account;
  • Use of electronic funds transfers from business accounts to pay for extravagant trips and the leasing of high-end luxury vehicles;
  • Wire transfers from one business account to the account of another business when the two entities have no apparent commercial relationship;
  • Credit card payments to online escort services for advertising, including small posting fees to companies such as Craigslist, as well as to more expensive advertising and website hosting companies;
  • Deposit of checks written in even amounts and with seemingly non-applicable phrases written in the remarks or memo field.   

FinCEN provided several more red flags in its 2014 Advisory: Guidance on Recognizing Activity that May be Associated with Human Smuggling and Human Trafficking – Financial Red Flags

Source: CUNA Compliance Blog

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