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Human trafficking involves the use of fraud, force, or coercion to obtain commercial labor services or sex acts. In practice, this crime is financially lucrative—from the International Labor Organization, human traffickers can make over $30,000 every 30 seconds. According to United Nations Children’s Fund, human trafficking is one of the most profitable illegal industries in the United States, second only to drug trade.
Human traffickers heavily rely on access to financial institutions to launder the proceeds of their crimes. Often bypassing standard anti-money laundering (AML) controls, traffickers utilize financial institutions (money services businesses (MSBs) are a prime example) as both conduits for facilitating the crime itself, as well as a destination for the proceeds made from the crime, per the Association of Certified Financial Crime Specialists.
Furthermore, the growth of technology has amplified the growth of human trafficking not only across the United States, but on a global scale. Specifically, the use of various social media platforms not limited to Facebook, Instagram, and X, have increased direct accessibility between traffickers and victims of trafficking, conversely making it more difficult for law enforcement and advocacy organizations.
In a different vein, a romance fraud occurs when an individual (a likely criminal) creates a fake online identity to gain victims’ affection and trust. Perpetrators of romance frauds cultivate a seemingly meaningful relationship with their victims before asking for money under false pretenses or committing fraud. Like human trafficking, romance frauds are incredibly profitable. According to the Federal Trade Commission, reported losses from romance frauds in 2023 amounted to $1.14 billion, with the average victim losing $2,000.
At the intersection of both crimes and their technology-powered growth exists a unique form of romance fraud. Unlike more well-known types of romance frauds often perpetrated by hardened criminals, this romance fraud is perpetrated by a human trafficking victim. Within this fraud, vulnerable victims such as the impoverished or children are being trained on what to say under the auspice of a better livelihood.
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Victims of this scheme can be found across the world. In a contemporary lens, we can examine Ukraine following the Russian invasion in 2022 as an example. Following the imposition of martial law, men between 18 and 60 years of age were (and continue to be since February 2022) banned from leaving the country. As a result, most Ukrainian refugees are women and children. These conditions have created a “perfect storm” for human traffickers currently operating in Ukraine and who commonly approach individuals online with promises of free transportation, lodging and employment.
In most cases, trafficking victims (who later become perpetrators) respond to online ads promising employment overseas with high salaries. They feel a sense of relief and safety. Unfortunately, they don’t arrive at a high-rise office building or a beautiful store front. Instead, they arrive at a secure compound comprised of “fraud dens” that are run by Transnational Criminal Organizations (TCO). TCO-affiliated individuals initially lure vulnerable individuals into being trafficked. In turn, these individuals, mostly young women, are then chained to computers, trained, and forced to victimize others to “earn” their freedom. These TCOs steal their victims’ identification and travel documents, thereby restricting their movements. They only provide limited food and water and often subject their victims to physical abuse if they don’t complete their jobs according to these standards.
These victims are trained in the art of social engineering to manipulate and influence targets, gaining their trust. They show compassion and admiration for their targets and quickly profess their love. They often send explicit photos and show strong emotions towards their targets. Eventually, they ask for money, starting with small amounts for made-up emergency situations, trapping their targets into sending money to help them.
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You may be the target of a romance fraud if the person you are communicating with online:
- Claims they live, work, or are traveling abroad.
- Claims to be notably younger than you.
- Quickly professes love to you.
- Sends or requests explicit photos and/or videos.
- Has a story that is inconsistent.
- Has a minimal online presence.
- Lacks proper grammar, although they claim to speak English.
- Is combative with you or tries to divert your attention when you question their intentions.
- Asks for money, often via non-traditional methods such as cryptocurrency or gift cards.
If your bank contacts you to express concern you are being victimized, this is a key red flag indicative of targeting!
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As there is a terrible human cost associated with human trafficking and romance frauds, the estimated proceeds generated from this are often ran through traditional financial institutions. Human trafficking can happen in any country and so can the associated romance fraud; therefore, it is important that financial institutions assess how they are at risk from the laundering of the illicit proceeds from this crime.
- Common Human Trafficking business fronts: Modeling and travel agencies, employment companies, “au pair” babysitting and international matchmaking services (mail order bride), massage parlors, hospitality, landscaping, construction, escort services, pornography, bars, strip clubs & cantinas, commercial cleaning services, carnivals
- Transactions conducted by individuals, escorted by a third party (under the pretext of requiring an interpreter or instances where the third party insists on being involved even if not warranted), to transfer funds to other countries; third party maintains possession and/or control of all documents or money
- Frequent transactions, inconsistent with expected activity or line of business, carried out by a business customer in apparent efforts to provide sustenance to individuals such as: payment for housing/lodging, regular vehicle rentals, purchases of large amounts of food, frequents purchases at pharmacies (e.g., medicine/condoms for victims)
- Payment to employment or student recruitment agencies that are not licensed/registered, or that have labor violations, or where the employer or employment agency serves as a custodian
- Frequent payments to online escort services for advertising, including small posting fees to companies of online classifieds as well as more expensive high-end advertising and website hosting companies (A customer’s account may share common identifiers, such as a telephone number, email, social media handle, or physical address, associated with escort agency websites and commercial sex advertisements)
- Business owner does not exhibit normal payroll expenditures such as wages, payroll taxes, social security contributions; payroll costs can be non-existent or extremely low for the size of the alleged operations, workforce, or business model
- Multiple accounts established for different businesses or persons with the same signatory powers on each account
- Frequent outbound wire transfers with no business or apparent lawful purpose, directed to countries at higher risk for human trafficking or to countries that are inconsistent with the customers expected activity (Customers frequently appear to move through, and transact from, different geographic locations in the United States. These transactions can be combined with travel and transactions in and to foreign countries that are significant conduits for human trafficking)
- Outbound wire transfers in small amounts, with no business or apparent lawful purpose by multiple individuals, sent at the same time from the same location to multiple recipients in the same geographical area; or (multiple wire transfers to the same beneficiary who may be in the US or in a Mexican city along the SW border)
- Business bank accounts that lack typical business expenses or account activity does not relate to the business; wire transfers from one business account to another business account that has no apparent ties
- Credit or debit processing for even dollar amounts, or cash transactions at time when atypical for business type (e.g., 2 am transactions)
- Leasing of high-end luxury vehicles and extravagant trips paid by electronic funds transfers from business bank accounts (trafficker’s lifestyle may be inconsistent with stated income/employment)
- Receipt of numerous incoming wire transfers or personal checks inconsistent with account type
- Checks deposited from a possible funnel account appear to be pre-signed, bearing different handwriting in the signature and payee fields
- Frequent exchange of small denomination bills for larger denomination bills by a customer who is not in a cash intensive industry
- Sudden increases in cash deposits, rapid turnover of funds and large volumes of cash deposits from unknown sources; substantial cash receipts are inconsistent with the customer’s line of business
- Money flows that do not fit common remittance patterns such as wire transfers that originate from countries with high migrant populations (Mexico, El Salvador, Honduras, Guatemala) directed to beneficiaries’ location in US or Mexican cities along the border (Customers frequently appear to move through, and transact from, different geographic locations in the United States. These transactions can be combined with travel and transactions in and to foreign countries that are significant conduits for human trafficking)
- Beneficiaries receiving wire transfers from countries with high migrant populations who are not nationals of those countries (see above bullet point)
- Wire senders may use similar transactional information, including commons accounts, addresses, phone numbers and IP addresses
- When questioned, the senders have no explanation for the purpose of the wire transfer and have no relation to the recipient of the funds
- New accounts that often reflect similar activity of that of the closed account
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As aforementioned, most romance frauds originate overseas and are often run by TCOs, which pose significant multi-jurisdictional challenges to U.S. law enforcement.
To combat TCOs involvement in romance frauds, HSI partners with other U.S. agencies including:
- U.S. Secret Service
- U.S. Customs and Border Protection
- DHS Office of the Inspector General
- DHS Office for Civil Rights and Civil Liberties
- Federal Bureau of Investigations
- U.S. Postal Inspection Service
- Internal Revenue Service
- Commodity Futures Trade Commission
- Federal Trade Commission
To combat TCOs, HSI and its partner agencies have collaborated alongside the Department of Justice to coordinate prosecution and enforcement efforts. More specifically, this effort involves law enforcement working jointly with prosecutors, foreign law enforcement partners, and the financial industry. HSI identifies and seizes assets derived from romance frauds and, when possible, works with the U.S. Attorney’s Office and foreign governments to return funds to victims in restitution. As a result of this collaboration, a more collaborative and cooperative law enforcement effort exists to successfully dismantle the TCOs that victimize individuals globally.
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HSI encourages the public to report suspected suspicious activity through its toll-free Tip Line at 877-4-HSI-TIP. Callers may remain anonymous. |
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HSI’s mission is to protect the United States by investigating global crimes that impact our local communities. We have over 10,000 employees stationed in over 235 U.S. cities and more than 50 countries worldwide. This gives us an unparalleled ability to prevent crime before it reaches our communities. |
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