Transcript NC Panel Swecker Human Trafficking Draft CU Ax

“Human trafficking is a multi-billion dollar
industry where perpetrators profit from
the control and exploitation of others.
While it can be found during the Super Bowl, it
can also be found at motorcycle rallies in South
Dakota, in the fields of Florida, in gangs in
California, and in brothels in Washington, D.C.
It’s modern slavery, and it affects every
corner of the country.”
Distinct yet under identified aspect of human trafficking is forced criminality
forced to commit commercial sex acts
…and then prosecuted by officials for prostitution
Victims are
PEOPLE
SMUGGLING
DRUG
TRAFFICKING
CORRUPT
PRACTICES
THEFT
ARMS
TRAFFICKING
TAX
EVASION
TERRORISM
“Banks asleep at the switch
need to wake up. . .
Bank Secrecy Act applies to
more than just drug and
terrorist financing.”
Now that’s a warning…
Aimed at addressing growing problem of
domestic sex trafficking of children in U.S.
74 dedicated task forces and working
groups involving federal, state, local law
enforcement and U.S. Attorney’s Offices
with Over 100 Victim Specialists assigned
6000 children rescued
2500 pimps, madams, and
their associates convicted
lengthy sentences including 30
life sentences
$3.1 million seized assets
(property, vehicles, monetary)
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25 defendants indicted in sex trafficking organization in GA
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35 year old leader sentenced to life in prison
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Trafficking ring traded women like slaves throughout
southeastern U.S.
As many as 30 migrant workers stood in line outside shacks
on farms in NC and GA, waiting to have sex with women
Women were shuttled to other farms to relive the horror
"I'm happy at the sentence but at the same time I'm sad,
because I know for every 10 women rescued, there are
50 to 100 more women brought in by the traffickers.
Unfortunately, they're not 18 or 20 year-olds anymore.
They're minors as young as 13.
They're little girls."
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14 defendants and 12 victims
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Matriarch running enterprise paid smugglers to
bring victims to U.S.
•
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Victims were undocumented Mexican and Honduran
nationals as young as 14 years old
Matriarch determined rates for sex acts based on age
and attractiveness of female
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Charged $500/hour or $250/half hour for youngest and prettiest victim
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Another victim’s rate was $70 for 15 min.
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For every sex act, enterprise also charged $20 fee
($5 admission and $15 for access to prostitution room and condoms)
In 18 months, enterprise acquired $1.2M from $20 fee alone
Conspirators laundered money and used cashier’s checks
totaling less than $10,000 to avoid reporting requirements
•
Sixteen children as young as 13 rescued
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More than 45 pimps and associates arrested
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Some pimps travelled from other states to force women
and children to have sex with Super Bowl tourists
“High-profile special events . . . have become lucrative
opportunities for child prostitution criminal enterprises."
Ron Hosko, FBI
Human trafficking is a "specified
unlawful activity" under U.S.
primary money laundering law
Transactions conducted with
proceeds from trafficking humans,
or used to further trafficking
operations can be prosecuted as
money laundering offenses.

Director - criminal prosecutor for 15 years

IT modernization & FinCEN Query

Enhanced data mining & analytical capability

New reports - slice and dice information in much
more advanced way

Tie together threats that before seemed separate

Committed to making this central role for FinCEN

“Follow the money”

First line of defense: “you”
“financial institutions simply
cannot cut corners on compliance…
failing to adopt and maintain a
real compliance structure will
have serious consequences.”
former USDOJ Criminal Chief Lanny Breuer
News reports of arrests, searches, indictments and prosecutions
314(b) notifications from another bank
Subpoenas
National Security Letters
Open source information
Powerful analytical programs to make links
Transactional observations
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Training and awareness
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Adopt FinCEN Red Flags
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Join ongoing law enforcement sharing
initiatives to refine indicators and red flags
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Analytics to identify networks
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Convergence of AML and Fraud
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Use of 314(b)
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Operation Cornerstone (ICE)