Operationalizing the Intersection of Money Laundering and HT

Operationalizing the Intersection of Money Laundering and HT
Image by Freepik

In July 2008, the contentious case of United States v Jeffrey Epstein laid bare some systemic challenges in prosecuting human trafficking (HT) cases.

Epstein's financial resources allowed him to negotiate a controversial plea deal, which resulted in him serving only 13 months in a county jail for charges related to soliciting underage girls as young as 14 for prostitution and sexual assault. This deal, orchestrated by then-U.S. Attorney Alexander Acosta, included provisions that granted immunity to any potential co-conspirators, effectively shielding others involved in his trafficking network from prosecution.1 This lenient arrangement has since been heavily scrutinized for its failure to adequately address the scope and gravity of Epstein’s alleged offenses.

Accountability, legal process and punishment should be the hallmarks of criminal justice. Contemporary legal scholars have argued that the modern criminal system is failing the most vulnerable of populations. Trafficking in persons is on the rise while our ability to ensure justice has plateaued at best. Holding human traffickers accountable is an essential component of the Palermo Protocol’s “3P” paradigm of prosecuting traffickers, protecting victims and preventing the crime.2

There is no greater clarion call for a generation of law enforcement (LE) officers and financial crime fighters to build tangible solutions to address the abhorrent victim identification and prosecution rates across the world.

Global Data on Victim Identification and Conviction

There are now an estimated 50 million victims of HT worldwide, more than at any other time in history—but only approximately 5,000 convictions globally each year. More than $236 billion of the proceeds of HT have passed through storied institutions.3

According to the U.S. Department of State’s 2024 Trafficking in Persons Report, there were 133,943 victims identified globally in 2023, a notable increase from 115,324 in 2022. However, the number of convictions rose to only 7,115 in 2023 from 5,577 the previous year.4 This disparity highlights a paramount issue: Despite more victims being identified, many traffickers continue to evade justice.

Global convictions for HT have dropped by 38% since 2015, despite the number of victims identified growing by 36% over the same period, according to the State Department.5

As per the United Nations Office on Drugs and Crime (UNODC) and shown in Graphic 1, organized groups are responsible for the majority of HT activities. An analysis of 942 court cases revealed that out of 3,121 convicted traffickers:

  • 74% of identified traffickers operated within networks or groups
  • Some were loosely connected in business-like criminal relationships
  • Others were part of structured criminal organizations with strong local ties
  • Only 26% of convicted traffickers were not associated with organized crime
  • Criminal organizations tend to traffic a larger number of victims compared to individual traffickers.6

This data underscores the prevalence of organized crime in HT operations and the unique opportunity at our disposal to identify more victims in turn.

Graphic 1: Share of Type of Traffickers’ Structure Reported in Case Narratives, by Number of Individuals Convicted

Graphic 1: Share of type of traffickers’ structure reported in case narratives, by number of individuals convicted

Source and visualization by: UNODC7

On a sanguine note, the global conviction rate, which had plummeted during the COVID-19 pandemic, returned to the pre-pandemic figures in 2019 as shown in Graphic 2. In line with the increased number of victims detected, the global number of convictions rose 36 percent between 2020 and 2022.

Graphic 2: Change in Number of Convictions for Trafficking in Persons in 2022 as Compared to 2019, by Region

Graphic 2: Change in number of convictions for trafficking in persons in 2022 as compared to 2019, by region

Source and visualization by: UNODC8

However, according to the UNODC, “While global conviction rates have increased it should be noted that many regions including North America, Eastern Europe and Central Asia, South America and East Asia report conviction numbers below the pre-pandemic levels. North America reported a conviction rate of (negative) -28% in 2022.”9

Challenges With Criminal Investigations

Efforts to combat HT are in many respects similar to efforts to combat money laundering. Efforts to tackle both face many shared challenges, including sophisticated and highly profitable criminal enterprises, cross-border    illicit financial flows, heavy reliance on international cooperation, and challenges related to the confiscation of criminal proceeds. Some contributing factors to investigative shortcomings are as follows:

Undue Reliance on Victim Cooperation: Trafficking-related investigations include peculiar features stemming from the cruelty of the crime and the trauma experienced by victims. Victims are often reluctant to cooperate with LE due to a lack of trust, serious threats to their personal security and intimidation by traffickers, as well as their irregular migration status.10

Victims of Crime Feel Revictimized by the Criminal Justice System: Secondary victimization or second injury emerged to describe persistent empirical findings that victims feel they are victimized a second time through their ill treatment by the criminal justice system and institutions.11 In her book Victimology: A Canadian Perspective, professor Jo-Anne Wemmers recognizes that “traditional legal theories are unable to accommodate victims.”12 Classical justifications for why society punishes people who commit crimes fall into one of two theories:

  • Retributive theory, which seeks to administer proportional punishment for wrongdoing, considers victims as “objects to justify punishment.”13
  • Utilitarian theory, which aims to deter, incapacitate and rehabilitate offenders, focuses on the collective interests of society, and is indifferent to victims’ needs.14

Sexual assault survivors routinely describe their experiences on the witness stand as “punishing,” “brutal,” “shocking,” “horrible” and “traumatizing.” According to one survivor, “Sometimes it’s worse going to court. The judge didn’t say he didn’t believe me, but given the standard you just can’t convict. That’s cold consolation [for victims] to go to court, bare their lives, and in their eyes, the other person walked free.”

Utilizing strategic and proactive investigative processes can effectively shift the burden of proof away from a reliance on victim testimony, and onto the prosecuting authority to both strengthen criminal justice procedures and better facilitate the safety and long-term well-being of victims and survivors. Such initiatives demand effective collaboration and information-sharing mechanisms embraced across the board.

Recommendations for Operationalizing the Intersection Between Money Laundering and HT

In order to effect system-level change to anti-HT measures, we need to break down silos between diverse stakeholders including:

Interdepartmental Initiatives: Canada’s National Police service (RCMP) integrated its efforts to target organized crime by creating the Integrated Proceeds of Crime (IPOC).15 IPOC members are able to dismantle organized crime groups through seizures and convictions. An RCMP sergeant explained, “It's a new era for money laundering cases because we're now investigating the offense of money laundering instead of the assets."16

Specialized Investigations Units: Most professionals working within AML departments have expertise either in trafficking and human crimes, or in money laundering, but rarely both. FIs, financial intelligence units and specialized LE units can support parallel financial investigations of trafficking offenses and provide crucial expertise and investigative tools to identify and freeze proceeds and assets linked to trafficking.17

Cross-Training: Local LE officers tasked with interdicting and identifying victims are rarely trained on financial crime investigative techniques. Patrol officers and troopers who are often the first line of defense in detecting victims of organized crime groups could leverage financial intelligence to uncover criminal networks without relying on victim disclosures.

In 2024, I was invited to train U.S. police departments as an adjunct instructor of AML and HT investigations. Synchronous workshops concentrated on state and federal AML statutes, financial intelligence analysis, forensic evidence gathering and following the money trail to uncover HT networks.18 A cadre of trauma-informed detectives were surprised to learn about the volume and quality of contextual information they could request from financial institutions (Fis).

A few months after the training, an HT detective stationed in the Pacific Northwest reported back to me on a local illicit massage business investigation, saying, “We started doing financials on Suspects A and B and found some accounts and reports of $1.8 million and just got surveillance and reports showing Suspect C, his wife and his adult son accessing the dirty account from Suspect A. We are getting dozens of bank warrants done and a ton of research because we are trying to dirty up this guy’s house, other businesses, etc., so we can seize the accounts, his real property and put him in jail for a minute or two.”

The course offered training to district attorneys on strategic prosecutions for favorable victim restitution and sentencing outcomes. For instance, a district attorney may find it beneficial to press racketeering charges while investigating money laundering and fraud conspiracies in an HT case.

Recent HT cases bolstered by racketeering charges in the US include:

  • Nxivm leaders, including Keith Raniere, who was convicted of racketeering charges and to 120 years in prison.19
  • Singer R. Kelly, who was sentenced in June 2022 to 30 years in prison for racketeering and sex trafficking.20

Strengthening Legislation: In 2013, France introduced a new provision in the Criminal Code (Article 324-1-1-1) that created the offense of non-justification of resources—essentially “laundering by association.”21 This provision, which targets individuals who cannot justify their lifestyle or assets, carries a maximum penalty of five years’ imprisonment and a fine of 375,000 euros ($387,000). Aggravated money laundering, meanwhile, carries a maximum penalty of 10 years’ imprisonment and a fine of 750,000 euros ($774,000),

In 2019, the French Supreme Court operationalized this provision by applying a presumption of “concealment, investment or conversion of criminal proceeds” in a court ruling.22

During a customs check, a man driving a car registered in Slovenia and traveling toward Spain and France was questioned about the contents of his vehicle. While he claimed not to be carrying more than 10,000 euros ($10,315) in cash, almost 30,000 euros ($30,945) were found hidden in the car. He was charged and convicted for transferring money without a customs declaration and money laundering.23

Such legislative provisions reverse the burden of proof so that prosecutors are required to prove only the discrepancy between a trafficker’s lifestyle and the financial resources reported on their official tax declaration.24

Public-Private and Supervisor-Led Information Exchange: In the U.K., the Joint Money Laundering Task Force (JMLIT), a public-private partnership that shares information on money laundering and terrorist financing risks, has been particularly successful. According to the U.K.’s National Crime Agency, the JMLIT has led to:

  • Over 280 arrests
  • The seizure or restraint of over 86 million pounds ($106.38 million)
  • The identification of over 7,400 suspect accounts
  • The development of enhanced systems and controls by FIs.25

Forge Partnerships With Lived-Experience Experts: Instead of burdening newly identified HT victims with the onus of disclosures and cross-examination during their trials, a recurring recommendation from survivor leaders is to partner with survivors who are already well on their way to healing.

The Canada Anti-HT Consortium26 (CAHTC) engages with survivors of adult and minor sex trafficking to build a risk-rated library of sex trafficking-related open-source data. Survivors work with data engineers and anti-money laundering professionals to cocreate learning models that evaluate the inherent risk factors in millions of sex-related ads scraped from forums catering sex trafficking customers. When labeling ad data based on risk factors such as keywords, emojis, frequency of ads published, number of providers, number of reviews and operating hours, a group of independent survivors often derive similar conclusions on the risks of forced criminality and sexual and labor exploitation. The CAHTC invites all FIs to leverage its data to enhance their human crime detection program.

Ending Slavery Through Reason and Urgent Action

In his famous 1789 speech, the pioneering abolitionist William Wilberforce urged the House of Commons to approach slavery with “not their passions” but their “cool and impartial reason.” He declared, “A trade founded in iniquity ... must be abolished,” vowing to pursue abolition relentlessly, regardless of policy or consequences.27

The stakes are much higher today. There are more modern-day slaves living in the world today than ever before. It is incumbent upon us to end modern slavery through impartial reason as well as collaborative and deliberate action.

Jinisha Bhatt, compliance consultant, founder, Canada Anti-HT Consortium, connect@fighthumantrafficking.ca,

  1. Mahita Gajanan, “Here’s What to Know About the Sex Trafficking Case Against Jeffrey Epstein,” Time, July 7, 2019, https://time.com/5621911/jeffrey-epstein-sex-trafficking-what-to-know/
  2. “A Framework for Balancing Prosecution, Prevention, and Victim Protection Priorities in Criminal Justice Systems,” United States Department of State, June 2024, https://www.state.gov/wp-content/uploads/2024/08/24-02934-TIP_Factsheet-A-Framework-for-Balancing-Accessible-08.14.2024.pdf
  3. “Top HT prosecutors unite in bid to boost global conviction rates,” Justice & Care, March 6, 2024, https://justiceandcare.org/news/top-human-trafficking-prosecutors-unite-in-bid-to-boost-global-conviction-rates/
  4. “The 2024 Trafficking in Persons Report,” The International Association of Women Judges, July 15, 2024, https://www.iawj.org/the-2024-trafficking-in-persons-report
  5. Ibid.
  6. “Global Report on Trafficking In Persons 2024,” United Nations Office on Drugs and Crime, December 2024, https://www.unodc.org/documents/data-and-analysis/glotip/2024/GLOTIP2024_BOOK.pdf
  7. Ibid.
  8. Ibid.
  9. Ibid.
  10. “Leveraging Anti-Money Laundering Regimes to Combat Trafficking in Human Beings,” Organization for Security and Co-operation in Europe, 2014, https://www.osce.org/files/f/documents/5/8/121125.pdf
  11. Benjamin Perrin, Indictment: The Criminal Justice System on Trial, Aevo UTP, 2023.
  12. Ibid.
  13. Ibid.
  14. Ibid.
  15. “​​Integrated Proceeds of Crime,” Public Safety Canada, December 2, 2015, https://www.publicsafety.gc.ca/cnt/cntrng-crm/rgnzd-crm/ntgrtd-prcds-crm-en.aspx
  16. Patricia Vasylchuk, “RCMP uses new approach to catch money launderers,” Royal Canadian Mounted Police, July 1, 2019, https://rcmp.ca/en/gazette/rcmp-uses-new-approach-catch-money-launderers
  17. Ibid.
  18. “City, Hamilton Health Hosting HT Prevention Training,” Daltonga.gov, July 30, 2024, https://www.daltonga.gov/citycouncil/page/city-hamilton-health-hosting-human-trafficking-prevention-training
  19. Sonia Moghe, “Nxivm founder sentenced to the remainder of his life in prison,” CNN, October 27, 2020, https://www.cnn.com/2020/10/27/us/nxivm-keith-raniere-sentencing-supporters/index.html
  20. “​From Hidden Crime to Public Controversy: Famous Human Trafficking Cases,” The Exodus Road, May 11, 2022, https://theexodusroad.com/famous-human-trafficking-cases/
  21. “France,” Eversheds Sutherland, https://ezine.eversheds-sutherland.com/global-aml-guide/france
  22. “Court of Cassation, Criminal Division, Public Hearing of December 18, 2019,” Légifrance, https://www.legifrance.gouv.fr/juri/id/JURITEXT000039692105
  23. “The French Supreme Court confirms its position on the presumption of money laundering,” Navacelle, July 14, 2020, https://navacelle.law/the-french-supreme-court-confirms-its-position-on-the-presumption-of-money-laundering/
  24. “From Hidden Crime to Public Controversy: Famous Human Trafficking Cases,” The Exodus Road, May 11, 2022, https://theexodusroad.com/famous-human-trafficking-cases/
  25. “Improving the UK’s response to economic crime,” National Economic Crime Centre, https://www.nationalcrimeagency.gov.uk/what-we-do/national-economic-crime-centre#:~:text=JMLIT%20is%20an%20innovative%20model,of%20collectively%20combating%20these%20threats.
  26. “Canada Anti-HT Consortium homepage,” Canada Anti-HT Consortium, https://www.fighthumantrafficking.ca/
  27. “William Wilberforce's 1789 Abolition Speech,” Brycchan Carey.com, https://www.brycchancarey.com/abolition/wilberforce2.htm

Leave a Reply