Human trafficking is one of the most illicit, yet lucrative industries in the world. One of the largest human trafficking cases in Texas involved a grandmother, Hortencia Medeles, who was convicted of conspiracy to commit sex trafficking, aiding and abetting money laundering, and money laundering. According to trial documents, Medeles’ profits exceeded $1.6 million in just 19 months. The incentive for the soulless to exploit the vulnerable is clear: money.
Therefore, to help end human trafficking, our laws must ensure that traffickers cannot profit. Texas can start by passing House Bill 2629. HB 2629 disrupts this system by requiring privately owned, white-label ATMs to be registered. ATMs serve an essential function, particularly in underbanked communities. However, traffickers have exploited our state’s lack of oversight for too long. Registering WATMs will allow law enforcement to prioritize investigations, determine persons of interest, reduce reliance on victim testimony, and facilitate the discovery and investigation of larger criminal networks and financial crimes.
In Texas, nearly 900 illicit massage business (IMBs) are suspected fronts for prostitution, and human trafficking. Make no mistake, some are organized criminal activity, involving multiple individuals and criminal networks spanning many states, and countries. The victims trapped inside are afraid to testify against their captors due to direct and implied threats to their lives and the lives of their family members.
Without victim testimony, law enforcement faces formidable challenges in building strong cases against the criminal networks. Financial intelligence can fill these gaps, lessening the need for direct testimony, and helping investigators identify the true profiteers. Local prosecutors can use financial intelligence to bring more serious charges and penalties against those responsible.
Most IMBs are cash only businesses. To capitalize on this arrangement, IMB operators purchase private, “white label” ATMs to use on the premises. Unlike ATMs owned by financial institutions, these “white-label” ATMs have little oversight—they can be owned and operated by anyone—and are not subject to the extensive regulations to which financial institutions must adhere. IMB operators stock their ATMs with cash made through human trafficking, and male customers at IMBs appreciate the convenience because a ‘generic’ business name is recorded on their credit card statement.
WATM operators must advise the state who they are and where their ATMs are operating. Registration is one-time only and capped at $200 total, regardless of the number of ATMs a particular operator registers. Simply put, the state of Texas would know who these ATMs are registered to, and where they should be located.
Passage of HB 2629 will yield tremendous results. Illicit business owners use every trick imaginable to conceal their identities. They pay someone with no connection to the business to appear on their corporate filings, DBA or permits. When law enforcement tracks this person down, it’s a dead end as he or she will have no information regarding the illicit business. However, when it comes to money and how it’s being handled, true owner(s) are likely involved. The low burden of registration imposed by HB 2629 will allow law enforcement to quickly identify those who actually profit from human trafficking. Once law enforcement has a legitimate person of interest, they can begin to piece the network together—and shut it down for good.
Targeted enforcement of financial crimes has historically been successful in crippling organized crime, but these strategies have not been fully utilized in the fight against human trafficking.
Call your local representative and insist they pass HB 2629. Stronger laws around financial crimes, such as HB 2629, will enable law enforcement to cut off the head of the snake instead of chopping at its tail.
Editor’s Note: The above guest column was penned jointly by Bob Sanborn and Caroline Roberts, of Children at Risk. Children At Risk is a Texas based nonprofit focused on research and advocacy for children. Sanborn, pictured above, is president of the group. Roberts is an attorney with the group. The column appears in The Rio Grande Guardian with the permission of the authors.
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