On 22 Mar 2023, RedCompass Labs, News & Insights, published the latest (seventh) in a series of articles and infographics on How to Follow the Money of a Human Trafficker. The series is based on its RedFlag Accelerator (RFA) model that enables banks and other financial services firms to accelerate the search of human trafficking and child sexual exploitation traces in their organizations and makes sharing the learnings globally accessible. The RFA is one of the more comprehensive sources of human trafficking red flags for financial services. The series provides samples of red flags discovered in banking financial crime for seven forms (scenarios) of human trafficking (see Additional RFA Information below).
‘Loverboy’ Sex Trafficker
Scenario #3004, 22 Mar 2023
🚩 Frequent change in online account access location
🚩 Inexplicable spending on luxury goods
🚩 Frequent payments to advertisers for adult ads
🚩 Spending on plastic surgery/beauty enhancement
Multi-Victim Housing Trafficker
Scenario #1004, 16 Feb 2023
🚩 Control over multiple bank cards
🚩 Same third party linked to multiple accounts
🚩 Excessive amounts of living expenses
🚩 Frequent purchases in pharmacies
US-Based Commercial Front Brothels
Scenario #9001, 17 Jan 2023
🚩 Business-related Details in Adult Ads
🚩 Frequent Payments to Commercial Sex Advertising (CSA) Sites
🚩 Beauty-related Business with Predominantly Male Clientele; Receiving Customer Payments Outside Business Hours
🚩 None or Very Low Payroll Expenditure
A Business Facilitating Labor Exploitation
Scenario #4003, 17 Jan 2023
🚩 Inadequate payroll expenditure
🚩 No employment or payroll taxes
🚩 Same owner for multiple businesses
🚩 Related entities in adverse media
Labor Exploitation
Scenario #2002, 1 Dec 2022
🚩 Same third-party for multiple individuals
🚩 Frequent Transactions with High-Risk Human Trafficking Countries
🚩 Inadequate stated personal income
🚩 Transacting with Employment Entities with Violations
Sexual Exploitation
Scenario #1001, 29 Sep 2022
🚩 Customer Details in Adult Ads
🚩 Address in Red-light District
🚩 Frequent incoming payments at night (2200-0600)
🚩 Incoming payments at night and predominately from males
🚩 High Turnover Low Balance
‘Epstein’ Scenario
Scenario #3003, 24 Aug 2022
🚩 Frequent change in spending locations
🚩 Multiple lump sum cash withdrawals
🚩 Frequent payments to modelling agencies, luxury rental vehicles, and/or multiple municipalities
🚩 Frequent transactions with offshore entities
Additional RFA Information
Q2 2022 sample of the RedCompass Labs RedFlag Accelerator Typologies publication:
Methodology
Typology – a general summary statement concerning observed facts about a particular class of human trafficking criminality (e.g., sexual exploitation, labor exploitation etc.) that are sufficiently homogeneous to be treated as a type.
Red flag – an indicator of any undesirable characteristic or behavior that can be detected in data, suggesting that there is a potential threat relating to criminal activity.
Scenario – a combination of red flags revealing a repeated persona-based pattern of elements (e.g., characteristics, behaviors etc.) in data that is matching a typology.
The sample has the following sections:
Section 1 provides an overview of the human trafficking and child sexual exploitation problem, explains the RFA methodology and terminology, organization and classification of the contents as well as training opportunities.
Section 2 provides an overview and examples of the RFA Typologies scenarios that can be used to detect suspicious financial activity that may be linked to human trafficking and child sexual exploitation. The section includes:
- A list of eight typologies included in the full RFA Typologies publication
- A list of 33 scenarios included in the full RFA publication
- An example of a typology: 2000 Labor Exploitation
- An example of a scenario: 2005 Labor Exploitation (Operation Fort Scenario)
- An example of a typology: 7000 Online Child Sexual Exploitation
- An example of a scenario: 7006 Online Child Sexual Exploitation – Victim (OnlyFans)
Section 3 provides an example of four red flags and illustrates the layout and level of detail of how all 343 red flags are documented, classified and presented in the full publication, depicting the suspected underlying activity and actors involved. The section includes:
- Two red flag examples from the 2005 scenario
- Two red flag examples from the 7006 scenario
Sections 4 and 5 of this sample provide examples of high-risk business types, activities and countries that are associated with higher human trafficking and child sexual exploitation risk.
Appendix A: Red Flag Groups: List of 16 groups.
Appendix B. Glossary: List of 25 terms / meanings.
A full version of the RFA Typologies is available to banks and other financial services firms who sign up via the RedCompass Labs website and are committed to collaborating, sharing their learnings and practical experiences of the typologies. The full RFA Typologies include 343 unique indicators that are specifically tailored and adapted for banks to reveal human trafficking patterns in their data. The list is broken down into two main categories – retail and business banking specific red flags – and 16 activity type groups, that can ease the navigation. To ensure the application through different client bases, services and jurisdictions, the indicators are classified depending on the origin and type of data, as well as the categories and sub-categories of the behaviors which detail the suspected underlying activity and actor involved. Each indicator is further enriched with aggravating factors, attributes, data points and reference data. The RFA offers a risk scoring capability that provides you with the weighted risk profiles for each persona your customer has matched against. The RFA Typologies is updated quarterly. Note a complimentary copy of the RedCompass Labs/Polaris ACAMS Guide to Human Trafficking Scenario #9001: US-Based Commercial-Front Brothels is available upon pre-registration for the latest version of the RFA Typologies. The guide provides the full list of relevant red flags needed to proactively investigate US-Based Commercial-Front Brothels.
