The Anonymous Companies That Protect Human Traffickers

By Allison Agoglia

Human trafficking is one of the most insidious crimes in our world today.  It’s a business that profits on depriving basic rights — buying and selling them for forced labor or sexual exploitation. Unfortunately, it is the third-or fourth-largest illegal industry in the world (depending on how one measures) — and one that is growing rapidly.  It is estimated to amount to $150 billion in profits each year while keeping 21 million people in slavery — at least that we know of.

Human traffickers hide in the shadows, making them extremely elusive to authorities. Vanessa Chauhan, a strategic engagement adviser at Polaris and FACT Coalition member, says, “It’s a hidden crime and unless you’re looking for it, you’re not going to find it.”  To remain hidden, some traffickers use illicit schemes, including complex webs of anonymous companies, that allow them to quietly launder the proceeds from their illicit activity and shield them from accountability.

In 2011, the Justice Department broke up a Moldovan human trafficking ring that spanned fourteen states and used anonymous companies registered in Kansas, Missouri, and Ohio to hide the traffickers’ identities and launder profits. The criminals made $6 million by tricking their victims and luring them in with the promise of a better life. In the end, the victims — who were forced to live in overcrowded and substandard apartments — were made to work at hotels, casinos, and resorts while their wages were seized.  To continue the exploitation, their visas were allowed to expire, so they could be threatened with deportation. In this case, the ringleader was ultimately caught but, unfortunately, this is the exception rather than the rule.

Every country in the world is affected by this crime. Rich and poor, all nations struggle with pinpointing the criminals who exploit desperate people — many of whom have endured unimaginable hardships in their battle for a better life.

Across the United States, illicit massage parlors are often used as covers for sex trafficking operations.  In a recent study, Polaris looked at massage parlors, primarily in the U.S., and found that over 6,500 of them are illicit businesses. In Fairfax County, Virginia — not more than 20 minutes outside of D.C. — they found 108 illicit massage businesses connected to 181 different limited liability companies (LLCs).  In Virginia, as with every other state, none of these companies are required to disclose the real people who own these companies and are benefitting from these crimes.

This anonymity enables predators to act without accountability and launder the proceeds with impunity.  To get the traffickers, cops try and follow the money but all too often the money trail ends at an anonymous company.  We can fix this.  Bipartisan legislation, to unmask the gang leaders, is gaining momentum in Congress. Representatives Carolyn Maloney (D-NY) and. Peter King (R-NY), Senators Ron Wyden (D-OR), and Marco Rubio (R-FL) have introduced Corporate Transparency Act (H.R.3089/S.1717).  The bills simply require companies to disclose their true, human owners when they incorporate and keep their ownership information up to-do-date.  Doing so would provide police and prosecutors, as well as financial institutions, with the information they need to pursue the kingpins behind modern day slavery operations.

Human traffickers have built a complex web of operations hidden behind U.S. laws that allow for secrecy.  Congress has an opportunity to expose and disrupt the current systems for laundering the proceeds from this and other crimes.  They should give the police and prosecutors all reasonable and necessary tools to successfully pursue their investigations.

Allison Agoglia is an advocacy intern with the FACT Coalition.