Digital Transactions Tell the Story About Human Trafficking

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Digital Transactions Tell the Story About Human Trafficking

By Elaine Pofeldt | Aug 29, 2018

When human traffickers check into a hotel, the last thing they want is for the staff to notice them. But thanks to efforts by the banking and credit card industries, it’s getting harder for them to keep a low profile. 

Their digital transactions tell the story. They may secure a room with a credit card, but then pay cash for it. They may frequently book rooms in different cities, like a business traveler does, but simultaneously be receiving public assistance payments. They may use their credit card to book online ads on adult sites. They may make frequent email money transfers. Once in a room, they may use a credit card to purchase frequent fast-food deliveries. They may deposit large amounts of money in a bank account via an ATM in the wee hours of the night.

The activity may move from one city to another, from one day to the next, down the corridors of human trafficking. Along the way, they may book a ride-sharing service or multiple train tickets to a single destination, for themselves and their victims.

None of these behaviors is illegal or necessarily even suspicious in many circumstances. But when they take place in concert, they can be a red flag signaling sex trafficking, in which a victim is being sold.

“When you put it all together, it points strongly to a trafficker,” says Peter Warrack, chief compliance officer at Bitfinex, a full-service trading platform for digital assets and cryptocurrencies, and a board member for the Canadian Centre to End Human Trafficking. He was also previously director of the anti-money laundering team at Bank of Montreal, leading an initiative called Project Protect, a public-private partnership to fight human trafficking in Canada.

Similar attention to the financial side of human trafficking is percolating in the U.S., where in April the Allow States and Victims to Fight Online Sex Trafficking Act of 2017, which holds sites that run classified ads liable for content related to sex trafficking, led to the seizure and closure of Backpage. Senators Elizabeth Warren and Marco Rubio are now championing the End Banking for Human Traffickers Act of 2017, which would push banks to close the accounts of anyone suspected of human trafficking. Hearings were held on it in the Senate Committee on Banking, Housing and Urban Affairs in January.

Warrack, based in Niagara, got involved in starting Project Protect after attending an Association of Certified Anti-Money Laundering Specialists Conference, where he heard two speakers talk about human trafficking (including Timea Nagy, a victim turned advocate who was interviewed in the June issue of The Meeting Professional). When the speakers asked the financial institutions in the audience to help them uncover the traffickers’ financial transactions, given their mandate to report suspicious financial transactions to the Financial Transactions and Reports Analysis Center of Canada (FINTRAC), Warrack volunteered to help. He happened to be sitting next to a colleague at FINTRAC, who offered to help him. As Nagy noted at the time, human trafficking was already being recognized as being linked to money laundering.  

Warrack had soon set up a partnership model made up of members from both public and private institutions. Their purpose was increasing both awareness of human trafficking and reporting of suspicious financial transactions to FINTRAC, without additional cost to the participants. Each financial institution would independently use the standard Suspicious Transaction Report (STR) form deployed for other suspect transactions. FINTRAC would mine the information submitted by relevant keyword searches and direct the intelligence it had gathered to appropriate law enforcement, such as police sex crimes units.

FINTRAC and Project Protect would collaborate on publishing typographies and indicators of human trafficking crimes to make it easier for financial institutions to spot it early. The project was set up to avoid breaches of privacy laws, in that the participants would only share macro trends, typographies and publicly available media on human trafficking. FINTRAC compiled a list of possible indicators of human trafficking, which was distributed to all reporting institutions across Canada and led to a significant uptick in filing of the STR form, according to data from Project Protect. The project was launched on Jan. 1, 2016. The number of forms submitted rose from more than 400 between Jan. 1, 2015, and Jan. 1, 2016, to more than 2,500 from Jan. 1, 2017, to Sept. 1, 2017. One new trend participants are studying is the use of cryptocurrencies in transactions by traffickers.

Technology can be used to aid investors at banks, Warrack notes. For instance, algorithms can be set up to identify suspicious transactions.

“They spit out alerts that are worked manually by investigators,” he says. “If it’s trafficking, we file a ‘suspicious act.’ The bank’s intelligence goes to FINTRAC.”

Warrack is currently working to raise awareness among other financial professionals about the signs of trafficking and what to do about them. In some cases, it may make sense for a bank to close down a suspicious account, he says, and when trafficking is suspected at a hotel, reporting it to the local police is often warranted.

The problem is widespread in the hospitality industry, according to Warrack.

“This goes on at all the major hotels—not just the sleazy ones,” he says.

In Canada, unlike in the U.S., it is legal to be a prostitute. However, it is illegal to pay one or to broker prostitution, as a pimp does. 

Warrack’s recommendation to hotel personnel who want to make a difference is to pay attention to their own instincts and report suspicious situations to the local police.

“I was in a hotel in Toronto a few days ago,” he says. “There was a guy with tattoos all over his neck in the company of a young girl who was skinny as a rake and looked drugged out of her mind. It’s obvious when you see it. The girls are underage and look it.”

Warrack isn’t alone in seeing the value in making it very difficult for traffickers to commit their crimes at hotels—and the power of financial detective work to identify them.

Andrea Boulden, manager of events for TDWealth, Toronto, and a committee member for Meeting Professionals Against Human Trafficking, speaks to both financial institutions and planners about human trafficking, running seminars about signs to look out for and what to do about it. She encourages them to use the TraffickCam app—which relies on volunteers to take pictures of their hotel rooms to add to a global database that investigators can use to find and rescue trafficking victims.

Boulden also offers ideas on how to weave trafficking-prevention into the RFP process in selecting a venue. She encourages planners to ask the following.

  • Are you aware of this growing problem as it relates to the use of hotels by criminals for this activity?

  • Do you currently have or participate in an education and awareness campaign aimed at employees in the hospitality industry? If so, which campaign?

  • Do you conduct your own training of employees to identify and report suspicious instances where child trafficking or illegal sexual exploitation might be occurring on your property? Is the training mandated? If so, what service-type of employees are trained?

  • Has your company signed on to the ECPAT-USA Tourism-Child Protection Code of Conduct? (ECPAT-USA is an organization that fights the sex trafficking of minors. The code, which is worldwide, is available online at

So far, Boulden has found her audiences receptive. She sees prevention of sex trafficking as being similar to sustainability when it comes to weaving it into the process of venue selection. Questions on green initiatives have been formalized over the years in the RFP process for many meeting organizers.

“It’s all about training and awareness building,” she says. 


More on the Issue of Human Trafficking

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Elaine Pofeldt
Elaine Pofeldt

Elaine Pofeldt is a freelance journalist in the New York City area who contributes to publications from CNBC to Forbes and is the author of the upcoming book The Million-Dollar, One-Person Business.