On January 13, 2023, FinCEN issued an alert which aims to better aid financial institutions in the detection of financial activity related to human smuggling along the southwest border of the United States. The alert provides trends and typologies specifically related to human smuggling occurring along the SW border. It also provides red flag indicators to help financial institutions better identify transactions potentially related to human smuggling and reminds financial institutions of their Bank Secrecy Act (BSA) reporting obligations.
Human smugglers engage in the crime of transporting people across international borders through deliberate evasion of immigration laws, often for financial benefit. According to FinCEN, less than 500,000 encounters occurred at the SW border during the height of the COVID-19 pandemic in 2020, which is a 53 percent decrease from the prior year. However, in 2021, there were 1.7 million encounters and increased to over 2.3 million encounters in 2022. Recent events involving the death of migrants attempting to cross into the United States illustrate the dangers associated with human smuggling and how smuggling networks exploit human beings for profit.
FinCEN has identified the following financial red flag indicators to assist financial institutions in detecting, preventing, and reporting suspicious transactions associated with human smuggling:
Transactions involving multiple wire transfers, cash deposits, or P2P payments from multiple originators from different geographic locations either across (1) the United States, or (2) Mexico and Central America, to one beneficiary located on or around the SW border, with no apparent business purpose.
Deposits made by multiple individuals in multiple locations into a single account, not affiliated with the account holder’s area of residence or work, with no apparent business purpose.
Currency deposits into U.S. accounts without explanation, followed by rapid wire transfers to countries with high migrant flows (e.g., Mexico, Central America), in a manner that is inconsistent with expected customer activity
Frequent exchange of small-denomination for larger-denomination bills by a customer who is not in a cash-intensive industry.
Multiple customers sending wire transfers to the same beneficiary (who is not a relative, and may be located in the sender’s home country), inconsistent with the customer’s usual business activity and reported occupation.
A customer making significantly greater deposits—including cash deposits—than those of peers in similar professions or lines of business.
A customer making cash deposits that are inconsistent with the customer’s line of business.
Extensive use of cash to purchase assets, such as real estate, and to conduct transactions.
Read FinCEN’s news release here.
The alert can be found here.