Canadian Financial Regulator Helps Foil Human Trafficking Ring

Canadian police, working with the financial regulator and the Canadian Centre to End Human Trafficking (CCEHT), has charged six people and located seven victims, in connection with human trafficking.

The year-long investigation – dubbed Project Eonni – began after information was obtained by CCEHT and the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), about a company called Moon Waiting VIP, which was believed to be involved with trafficking in the Greater Toronto Area (GTA).

After executing 20 search warrants across the GTA, police have charged six people and seized more than $4m from accounts. They also seized $3m in illegal cannabis and 34 firearms with ammunition.

Seven victims have been taken to safe locations and investigators are encouraging any other victims to come forward.

The charge sheet includes an array of offenses such as ‘other fraud’ and ‘possessing property purchased with the proceeds of crime,’ underlining the importance of looking at the full picture of an individual’s behavior and at linked individuals. If, for example, the investigation had just stopped at one offense, these wider crimes may not have been uncovered.

Human trafficking awareness

Trafficking can be connected to crimes such as sexual exploitation and slave labor. Since 2009, Canadian Police have reported 1,708 incidents of human trafficking, ranging from forced labor in the fields to the sex trade. Data collected from the CCEHT’s hotline reveals that 90% of sex trafficking survivors/victims in Canada are female.

“Put simply – the more equipped Canadians are to spot the signs of human trafficking and how to respond, the more likely they are to fill gaps and save lives,” said Julia Drydyk, the CCEHT’s Executive Director.

In 2016, Canada launched a unique public-private partnership – Project Protect – to address crimes associated with human trafficking and sexual slavery. It was led by major banks, FINTRAC, and law enforcement agencies.

The partnership followed a challenge laid down by human trafficking survivor Timea Nagy at the Association of Certified Anti-Money Laundering Specialists (ACAMS) conference in Toronto, for Canadian FIs to do more about human trafficking.

Nagy felt that anti-money laundering (AML) experts were already mandated to report suspicious behavior pertaining to money laundering and that trafficking was recognized as a predicate offense for money laundering.

In 2019, the National Strategy to Combat Human Trafficking was launched in Canada, bringing together all federal efforts with one strategic framework. Under the strategy, the government committed $57.22m over five years for new and enhanced federal measures.

Recent measures to tackle human trafficking in Canada have come from more unexpected directions, with the trucking industry educating drivers in both Canada and the US about human trafficking, what to look for and how to report it.

Training front-line staff who interact with customers to spot red flags is also crucial. These could include a third party talking extensively on behalf of the customer, or bringing in multiple people either to open accounts or carry out a transaction; multiple third parties coming in to pay money into the same account, or cash being paid in at different locations into a single bank account.

Resources for compliance teams

For compliance teams in Canada, a 2017 report from Grant Thornton on preventing human trafficking in Canada has lots of useful tips, including financial activity that should raise red flags. The Anti-Human Trafficking Intelligence Initiative also has a host of helpful resources for compliance teams globally, particularly its ‘Be On The Lookout’ flyer for FIs and ‘Red Flags and Indicators Applicable to Sex Trafficking & Forced Labor’.

The annual Trafficking in Persons Report from the US Department of State contains extensive information, including the role of the financial sector and ‘country narratives’ that show statistics, risks, and trends for individual countries regarding human trafficking.

Read more about the AML landscape in Canada, and how to combat human trafficking with AML efforts.