A Formula for Disruption

Note from the Author, Rosie Cataldo, Member of The Knoble Network and SME on Child s*x Trafficking:

Numbers tell a story. As individuals who seek to learn more about disrupting human crime, it is essential to understand what is behind the numbers. In the realm of s*x trafficking disruption, numbers tell a part of the story. As a network of financial crime fighters, we focus on ways to follow the money and analyze the movement to detect, interrupt and prevent crimes such as human trafficking.

Consider exploring a formula for disruption that involves A) following the money and trends, B) predicting patterns to anticipate illicit activity, and C) listening to survivors. These elements are necessary to disrupt the illegal sale of humans for exploitation. Those with lived experience who have come out on the other side of a very dark place—survivors and overcomers—have a new superpower. Many overcomers who serve in the anti-trafficking space have alchemized their experiences and work to shield others from experiencing the same inhumane treatment they’ve endured. Survivors can have an immense passion for the fight and the critical knowledge needed for deterrence.

There are many gaps and grey areas in measuring aspects of criminal enterprises. There are facts and data in certain areas, gathered from hotlines, law enforcement, and judicial cases, which are helpful in measuring aspects of these crimes. In reality, the illicit and growing industry of s*x trafficking cannot fully be measured or quantified.

“In the US, we don’t have a reliable estimate for the prevalence of human trafficking within this country, but the US is definitely a source, transit, and destination country for a $150 billion illicit industry …” Cardell T. Morant, Director, U.S. Department of Homeland Security‘s Center for Countering Human Trafficking, Morant adds that the impact of these crimes lasts far beyond the judicial process.

Our Eyes Can Be Trained to See It

Sadly, most people don’t think about these crimes until it impacts themselves or someone they know personally. However, learning to spot the signs of possible human trafficking in the real world or in the banking world is akin to shopping for a new car. Once you know what to look for, you see it. Knowing the dark details behind s*x trafficking is not necessary, but it is vital to learn how to recognize it and disrupt it. For the perpetrators, this is a business. These crimes exist because of greed and corruption of power. Many layers are involved in this epidemic; however, we will focus on the money.

Due to human crimes primarily being financially motivated, movements, such as The Knoble’s, to awaken, equip and deploy the financial sector is an extremely needed strategy to cause necessary disruption for the greater good. Keep in mind: The minority of people are doing the majority of the damage. The odds are in our favor for interference.

The Challenge: Quantifying

It is difficult to measure the amount that a trafficker brings in annually. Not only are these crimes hidden, but victims don’t necessarily know that they are, in fact, crime victims. This is due to the mental manipulation between a trafficker and a victim. This can be extreme. There are many variables, such as geographic location, the type of trafficker, how many victims they control at one time, their health, compliance, and age. And, just because you attempt to estimate a trafficker’s income, you can’t predict how much money street-level traffickers move through a mobile payment service, like CashApp, or a person-to-person payment service, like Venmo. Paying attention to the details—like deposits, withdrawal amounts, and their locations, add up.

Biz Trends

To give perspective around just how big the fastest-growing illegal enterprise is, let’s peek at a big-box store, Costco’s, revenue:

• Costco’s annual revenue in 2022 was $226.954 billion, a 15.83% increase from 2021.
• Forced labor in the private economy generates US$ 150 billion in illegal profits per year, about three times more than previously estimated, according to the International Labour Organization (ILO).
• Costco has 584 locations in the United States and 848 warehouses worldwide.
• As of 2022, The Network (a Virginia-based 501c3) assessed that over 11,000 illicit massage businesses (IMB) operate in all 50 states. This industry generates an estimated $4.3 billion annually in illicit revenue in the US alone.
• Costco has 123 million members as of February 2023.
• The number of “Johns” (s*x buyers) has exploded in the digital age.
• Costco has 304,000 employees, with 203,000 working in the US.
• Human Trafficking is the fastest-growing criminal enterprise worldwide.
• Costco is the sixth-largest retailer in the world and the third-biggest in the US, behind Walmart and Amazon.

Costco’s revenue is based on consumer demand. Without demand or desire for the goods, its revenue wouldn’t be on a consistent upswing. Human trafficking is no different. It is fueled by demand. Although the types of traffickers vary, depending on their methods, they all infuse marketing 101 tactics—however, their banking strategies are non-traditional for street-level s*x trafficking. These booming sales within s*x trafficking involve real-life people whose sellers and buyers use them as mere commodities. The aftermath of continual demand is destructive on many levels. It impacts all of us.

The ILO report Profits and Poverty: The Economics of Forced Labour, said two-thirds of the estimated total of US$ 150 billion, or US$ 99 billion, came from commercial sexual exploitation, while another US$ 51 billion resulted from forced economic exploitation, including domestic work, agriculture, and other economic activities (this is 2014 data). Nonetheless, it gives us all an idea of the profits stemming from these crimes. Fifty million people were living in modern slavery in 2021, according to the latest. Of these people, 28 million were in forced labor, and 22 million were trapped in forced marriage.

The number of people in modern slavery has risen significantly in the last five years. 10 million more people were in modern slavery in 2021 compared to 2016 global estimates. Women and children remain disproportionately vulnerable. (Global Estimates of Modern Slavery.) The estimated number of people in situations of trafficking rose by 12 percent between 2016 and 2021, the latest international consensus study found. Today, some 50 million people around the globe are living without the freedom to choose how they live and work, according to the International Labor Organization (ILO), the International Organization for Migration (IOM), and Walk Free.

Justice Stats

Another way to attempt to measure the prevalence of human trafficking is via the court system. However, bringing a trafficker to justice doesn’t come without immense challenges. Therefore, court cases involving traffickers do not accurately depict the magnitude of the problem. In fact, it shows the dire need to implore citizens to recognize and report potential illicit activity.

This report describes the Bureau of Justice’s activities during 2021 and 2022 to collect data and report on human trafficking as required by the Combat Human Trafficking Act of 2015.

Highlights

• A total of 2,198 persons were referred to US Attorneys for human trafficking offenses in fiscal year 2020, a 62% increase from the 1,360 persons referred in 2011.
• The number of persons prosecuted for human trafficking increased from 729 in 2011 to 1,343 in 2020, an 84% increase.
• The number of persons convicted of a federal human trafficking offense increased from 2011 (464 persons) to 2019 (837 persons) before falling in 2020 (658 persons).
• At year-end 2020, for the 47 states that reported data, 1,564 persons were in the custody of a state prison serving a sentence for a human trafficking offense.

October 2022; Publication Series Human Trafficking Data Collection Activities

A Formula

According to the article, Houston, We Have a Problem: Cost of Rise to Traffickers, Buyers, and Victims in the Commercial s*x Trade: “Few scholars have attempted to calculate the overall cost of risk to traffickers, buyers, and sellers/victims to understand better how and why this industry flourishes. In 2009, economist Siddarth Kara built an economic estimation model to gauge the cost of risk of trafficking individuals for commercial s*x in seven different countries, including the United States. Using traditional economic theories of risk and reward, Kara suggested that it is vital to attack the industry’s immense profitability … by inverting its risk-reward economics; that is, by making the risk of operating a s*x slave operation far more costly.”

Kara describes the commercial s*x industry for what it is: A mature, multinational corporation that has achieved a steady-state growth and produces immense cash flows … [and] has four components: a product (the victim), a wholesaler (the trafficker), a retailer (the slave).

No Days Off

Most research on domestic pimp-controlled s*x trafficking suggests that victims do not get paid days off and are forced to deliver a $1000/day quota to their traffickers 365 days a year. Yet, to be conservative in their estimates, The Avery Center suggests calculating the annual workday total at 260 days to account for incarceration, illness, hospitalizations, assault, or other forms of violence. Given these figures, they estimated that victims in Houston, TX, are valued at roughly $182,000 per year:

EV (Estimated Value) = ($1000 – $300) × 260 = $182,000 profit per victim annually

Subtract $300 for overhead costs: Hotel, food, advertising, condoms, grooming/clothing, etc.

Source: The Avery Center

The Association for the Recovery of Children’s Tina Baz, who works to combat s*x trafficking, has street-level knowledge and shared anecdotally, “A pimp, on average, controls 4-5 girls at a time.”

The Breakdown: $182,000 profit per victim x 5 victims = $910,000 estimated annual income per trafficker

Simply because you can attempt to calculate this street-level s*x trafficking income estimate does not mean you will see this amount floating around in banks or payment apps. “The reality is that they [traffickers] blow through the money as soon as they get it to portray themselves as bigger and badder than they are,” shares Heidi Chance, a subject matter expert on domestic s*x trafficking with over 25 years of law enforcement experience.

Chance, founder of Chance Consulting LEO and AChanceForAwareness.com, brings up an incredibly important point regarding the profits a trafficker obtains from exploiting victims, “The money is spent as quickly as it is earned,” adding that, “The most I’ve ever seen a trafficker process is $24,000 in cash, hidden in a couch. I have never seen a pimp have $100,000. A general street-level pimp, the most common type that Chance works to combat domestically, is not at that level. Their profits will not go through brick and mortar banks, but apps like CashApp are most common,” says Chance.

Regarding indicators for those who monitor potentially fraudulent activity within banks and financial institutions, it is crucial to look for patterns of deposits that follow up with multiple, frequent, and regular withdrawals, in amounts like $800 and $50, explained Chance, who added that reloadable gift cards like NetSpend (no credit check or minimum balance required) are another form of exchange that is seen in street-level s*x trafficking. Chance uses her expertise in combating human trafficking to equip law enforcement and other organizations with tools and awareness to ‘fight for a chance’ to change the realm of s*x trafficking.

Behind the Numbers

Reading the numbers is one thing. Acknowledging that the dollar signs refer to the sale of a human, in this case for s*x, is demoralizing. We know the average age for a person to enter the s*x trade is between 13 and 15 years. With the explosion of the digital age and the ease of access to violent p*********y, we see viewers who can no longer get their dopamine fix online. Therefore, the trend shows “Johns” transitioning to purchasing s*x. When a s*x trafficking victim over 18 is no longer alluring, the pattern of the “John” moves towards purchasing s*x with a younger victim, and the trend points towards more violent s*x. Together, we can change this trajectory.

There is a massive amount of information tied into these numbers. It’s not pretty. Knowing how these s*x trafficking schemes play out is essential. Every single day, traffickers are motivated to move, work and sleep their victims. Most research on s*x trafficking victimization reveals that victims do not earn any money exchanged for s*x. Noticing travel patterns, such as airfare purchases, within financial transactions is essential. Most individuals who have lived experience will tell you that transportation is central to exploitation. This is to maximize profits and avoid law enforcement. There are benefits to knowing what is on the other side of those large and small purchase patterns, deposits, accounts, and trends in movement. It all adds up to deterring and preventing further destruction stemming from exploitation and human trafficking.

There are layers upon layers. When we peel them back, we have a greater understanding and develop better ways to prevent these inhumane crimes from occurring. By virtue, you cannot put a price on human life. Humans are not commodities. We are here because there is a growing minority working to gain tremendous profits by selling humans. The Knoble Network—which includes you—is waking up the majority for the necessary shift.

The Formula for Disruption: Awaken (Education) + Equip (Training) + Deploy (Action)  = Systemic Change

May this motivate you to fill in the gaps and keep track of your findings, develop an in-house system for flagging illicit activity, establish a relationship with law enforcement, and stay current on scams and trends of monetarily motivated crimes. You don’t need to change the world, but you do have the power to help save one.