Human traffickers have continued their pivot towards peer-to-peer payment channels during the COVID-19 pandemic while also creating new streams of revenue from OnlyFans, a website for uploading and selling user-generated pornography, sources told ACAMS moneylaundering.com.
Since the shutdown of illicit adult advertising website Backpage.com in April 2018, banks and other financial institutions have sought to identify the evolving financial patterns of human traffickers at home and abroad who together rake in tens of billions of dollars each year by forcing their victims to work in the sex industry while trapping them in debt.
Organized sexual coercion, like other licit and illicit commerce, has shifted to the digital realm during the pandemic, with Polaris, a nonprofit group that manages the U.S. National Human Trafficking Hotline, disclosing in July that reports of online sex trafficking nearly doubled since U.S. lockdowns began in March of last year, while “street-based” claims dropped 30 percent.
Those same reports also show traffickers directing more of their clients to pay them through mobile platforms, Sara Crowe, a senior director at Polaris, said during a Sept. 28 panel at the ACAMS AML & Financial Crime Conference in Las Vegas.
“We do see multiple peer-to-peer platforms show up in our data … but when it comes to sex trafficking in the U.S., by far the most commonly referenced platform is Cash App,” Crowe told moneylaundering.com in an interview after the conference. “It is probably the most frequently referenced financial brand in the hotline data.”
When asked for comment, Cash App, a San Francisco-based mobile payments platform that operates similarly to Venmo and Zelle, told moneylaundering.com in email Friday that the company rejects all payments tied to sex trafficking and other crimes, and employs “several teams that partner with compliance” to monitor accounts for suspicious transactions.
“This monitoring is inclusive of KYC, AML, and other transaction-review processes that are compliant with applicable laws and regulations,” the company wrote, referring to know-your-customer and anti-money laundering protocols.
Mobile payment channels have risen in popularity among traffickers despite creating a digital ledger of transactions for investigators to potentially track.
The ledger feature may even appeal to traffickers, many of whom now use Cash App and similar platforms to monitor their victims and collect funds from them directly, Lieutenant William Matchko of the Las Vegas Metropolitan Police Department said during the Sept. 28 panel.
“It’s very easy if you have a fake ID to create a fictitious account and lose the money trail through that app,” he said.
Cash App told moneylaundering.com Friday that customers must provide their full name, birthdate, last four digits of their social security number and a mailing address, and may be asked to submit additional data if those details cannot be verified.
Traffickers have frequently disguised their financial activity in recent years by buying prepaid cards and converting them into cryptocurrency, routing credit-card payments through third-party processors and orchestrating trade-based schemes.
Peer-to-peer payment platforms, a relatively new channel for moving proceeds from trafficking operations, have posed a serious challenge for compliance staff at the banks that serve them. Most of the companies register as money services businesses as federally required, but afterwards share few client details and respond slowly to follow-up requests.
U.S. lawmakers want the financial services industry to play a larger role against human trafficking, but banks and money services businesses have consistently struggled to detect payments linked to the crime.
Those struggles have persisted in the nearly three years since the Treasury Department’s Financial Crimes Enforcement Network added a human-trafficking checkbox to the suspicious-activity-reporting form, a former State Department official told Congress in March.
Banks and other institutions filed only 3,100 human trafficking-related SARs to FinCEN last year and have filed almost the same number this year, even after the bureau ranked the finances associated with the industry as a top reporting priority.
Panelists at the Las Vegas conference also discussed traffickers’ exploitation of OnlyFans,. In August, the website announced plans to bar all pornographic content amid a long-running dispute with banks and payment processors, only to reverse itself days later.
Polaris began teaming with global banks last year to identify common patterns of illicit finance linked to OnlyFans and discuss their findings in general terms, Crowe said, but their efforts have mostly only confirmed the difficulty of identifying traffickers through transactional data alone.
A spokesperson for OnlyFans told moneylaundering.com Monday that the company limits content creators to charging a maximum of $49.99 per month per subscription, and caps the amount of tips fans can submit and creators can receive at $500 per day.
“OnlyFans has strong anti-money laundering controls in place,” the spokesperson said. “We monitor transactions and our anti-fraud team actively flags suspicious financial activity.”
Contact Daniel Bethencourt at email@example.com
|Topics :||Human Trafficking , Anti-money laundering|
|Source:||U.S.: Law Enforcement , Nonprofits/Private Organizations|
|Document Date:||November 1, 2021|