Forum examines financial sector’s role in combatting human trafficking

With human trafficking generating an estimated $150 billion annually, experts at an NYU Law Forum sponsored by Latham & Watkins unpacked the way in which money—the force driving the illicit industry—is a crucial key to its undoing. During the February 26 event, panelists discussed the financial sector’s role in combatting modern slavery in the forms of forced labor and sex trafficking. 

Panelists of Latham and Watkins Forum on Human Trafficking
Krishna Patel, Barry Koch ’80, James Cockayne, and Alicyn Cooley

Alicyn Cooley, executive director of the Program on Corporate Compliance and Enforcement moderated the forum. The panelists—James Cockayne LLM '05, director of the United Nations University Centre for Policy Research; anti-money laundering consultant Barry Koch ’80, commissioner of the Liechtenstein Initiative for a Financial Sector Commission on Modern Slavery and Human Trafficking; and Krishna Patel, a former federal prosecutor and managing partner of KnDO Advisors—each delivered a presentation on their anti-trafficking efforts.

“Modern slavery is essentially an advocacy term that encompasses different legal concepts including slavery, human trafficking, forced labor, servitude, forced marriage, and there are actually some others as well,” Cockayne said. “When we talk about modern slavery, we’re talking about around 40.3 million people…that’s 1 in every 185 people alive today.”

Cockayne presented key points in a report produced by the Liechtenstein Initiative, in which Cockayne served as a commissioner ex officio. The document provides guidance for different actors in the financial sector to explore how their business relationships and operations are tied to modern-day slavery, so that they can employ unique strategies to combat it.

Unlike other crimes which have unique motives such as revenge or political gain, human trafficking is exclusively about money, said Koch, as he discussed the ways in which he and his colleagues have identified traffickers from their “financial footprint.” During his earlier tenure as associate general counsel at JPMorgan Chase, Koch was counsel for the bank’s anti-money laundering compliance program. His colleagues developed a model overlaying the attributes of customers, accounts, and transactions in jurisdictions with high risks of trafficking. With the overlay, transactions that would normally seem unremarkable merged in ways that allowed investigators to zero in on likely traffickers. 

“We looked at travel in those high-risk jurisdictions, we looked at foreign wire transfers, we looked at late night credit card swipes…you can see what’s starting to happen,” Koch said. “We actually had some interesting alerts where we were tracking a ring that was transporting enslaved girls from South Florida into Massachusetts…a ring initially found through road tolls charged to E-ZPass.”

Through sophisticated tools and collaboration with law enforcement, the bank was able to surveil millions of transactions and provide information that led to investigations, prosecutions, and victim rescues. One of their projects involved identifying credit cards that made excessive charges in amounts corresponding to the fees charged by the classified advertising site Craigslist, and then researching cardholders’ demographics online. Those searches led to public websites offering illicit sex services, often with minors.  

Koch also emphasized the plight of victims who, after being freed from servitude, typically face financial hardship, including poor credit and identities stolen by traffickers. He indicated that the Financial Sector Commission, through the Liechtenstein Initiative, formed a consortium of banks in the US, the UK, Central Europe and Canada, to help survivors open bank accounts and build credit to ease their reentry into the financial system. 

Patel spoke from a law enforcement perspective, describing the challenges of bringing trafficking cases in the 1990s, prior to the Victims of Trafficking and Violence Protection Act of 2000. The act broadened the scope for bringing trafficking charges to cases that involved psychological control of victims as well as just physical coercion.

“In every single case that I have tried in front of a jury, the victim is the most important part of the story,” Patel said. “But one of the things that financials can do is they can corroborate so much of what that victim has to say.”

With transaction analysis tools helping to thwart sex trafficking crimes, the report from the Liechtenstein Initiative for a Financial Sector Commission on Modern Slavery and Human Trafficking calls for an extension of those tools to better address labor trafficking, a trickier endeavor because of the intertwining of illegitimate and legitimate revenue and complexity of labor supply chains. 

As the panel concluded, Koch pointed to his experiences in encouraging students in the audience to pursue successful career paths that also make a positive societal impact. 

“There are a lot of opportunities to do well by doing good,” Koch said. 

Posted March 26, 2020