As the COVID-19 pandemic continues to wreak havoc on the globe, criminals continue finding new and manipulative ways to exploit the scenario. Human trafficking has continued to evolve, creating a new wave of victims and revictimizing those already exploited.1 In addition, convergence of criminality has notably been on the rise as perpetrators look to diversify their illicit revenues by further coercing their trafficking victims. For the financial sector, this means a potential increase in attack vectors that require resources to detect and identify these crimes brought about by evolving criminal enterprises.
Child sexual exploitation
Global school closures during the pandemic forced children to stay home, increasing their vulnerability to exploitation. UNESCO reports that during the height of the lockdowns in spring 2020, children in 194 countries were impacted by school closures, equaling 90% of students at all education levels.2 In August 2020, UNICEF issued a report stating that at least 463 million children were not able to access even remote learning during these lockdowns.3 This type of disruption in education and overall wellbeing makes children considerably at risk for exploitation.
According to a recent Interpol assessment, there has also been an increase in sharing of child exploitation material coupled with the underreporting of child abuse.4 Given lockdowns and more time online, pedophiles and pedophile groups are establishing more peer-to-peer forums as well as collecting and organizing child abuse material.5 Children are increasingly vulnerable to online enticement, given not being in school and less adult supervision at home due to parental unemployment, parental illness or hospitalization, and other distractive issues related to COVID-19.6 Children are also away from potential and traditional reporters of child abuse outside the home such as teachers, day care workers, and after-school and/or community programs.
Economic challenges facing families further exacerbate child online exploitation, facilitators and/or exploiters existing in the home. Online enticement can lead to sextortion (i.e., payment in exchange for sexual images and/or forced exchange of sexual images ultimately leading to human trafficking). Abusers are also accessing and luring children into conversations via platforms that are not as secure with potential for these children to reach forums in the dark web.7
Reports of online exploitation (images and videos) into the U.S. National Center for Missing and Exploited Children doubled in the first half of 2020 compared to the same period in 2019.8 Online enticement also escalated in 2020,9 as Europol has reported the rise of online child sex abuse in the European Union.10 However, this surge in reported incidences―combined with the adverse effects of pandemic-related countermeasures like lockdowns and work from home orders―have strained the efforts of those tasked with mitigating associated risks. One United Kingdom nongovernmental organization (NGO), the Internet Watch Foundation, reported that their removal of child abuse material off the internet decreased by 89% during the first month of the spring lockdown.11 The NGO could not remove the material at the same rate, or even at their old rate, hence the increase in reporting and decrease in removal. Due to capacity issues that analysts are experiencing because of social distancing and other pandemic-related challenges, this example illustrates the impact of the pandemic on those fighting and addressing this crime.
The Continued Rise of Cryptocurrency
Compounding the challenge of human trafficking is the rise in popularity, as well as price, of cryptocurrencies such as bitcoin. Bitcoin, along with many other cryptocurrencies, rose in price exponentially throughout 2020. Unfortunately, this virtual gold rush brought a lot more users and thus more risks.12 In April 2020, the FBI released a statement that they expect more cryptocurrency-related schemes that target all demographics as a result of COVID-19.13 In addition to fraud, cryptocurrency is also being used to fund child exploitation and pay for online content related to sex, whether it be advertising or material that is both legal and illegal.14 For example, Pornhub―under pressure for not taking a tough enough stand against child exploitation from multiple outlets―moved to only accept cryptocurrency after being cut off by major credit card companies.15 As stated above, this rise in usage parallels that of the internet itself; increased user growth comes with increased risks, particularly for human trafficking and modern slavery given the prevalence of the role the internet now plays in its facilitation.
Exploiting COVID-19 Relief Programs
Criminals, potentially including those involved in human trafficking, are also exploiting pandemic relief programs. As legitimate businesses have pivoted to offset the impact of COVID-19, illegitimate businesses have followed suit via an increase in convergence on criminality.16 In October 2020, the Financial Crimes Enforcement Network (FinCEN) issued an advisory regarding unemployment insurance fraud during the pandemic. According to the advisory, U.S. law enforcement and financial institutions (FIs) have found “numerous cases of COVID-19-related UI [unemployment insurance] fraud.”17 There was also an alert issued for the sale of counterfeit, illicit and unapproved vaccines as well as the detouring of licit vaccines.18 In addition, FinCEN released a supplemental advisory on human trafficking citing that “the effects of the pandemic may also impact the typologies and red flag indicators” since victims are not traveling and are not around any potentially intervening outside support.19
Typically, victims are financially exploited by their traffickers; the traffickers control victims’ bank accounts and assets and often use their victims’ names to open bank accounts. Traffickers then access the accounts, forcing their victims to turn over any deposits, earnings, etc., including any government relief they may have been coerced to apply for on their trafficker’s or traffickers’ behalf. In a pandemic-rocked world, traffickers could be creating false unemployment claims or abusing other U.S. government COVID-19 relief programs, either utilizing their victims directly or through front companies. This could be happening not just in the U.S., but globally. Traffickers could also be involved in other illicit activities related to the pandemic such as counterfeit goods (i.e., vaccines).20
Editor’s note: This is an excerpt of an article that will appear in the ACAMS Today March-May 2021 print edition magazine. Please look for the article in its entirety during the first week of March on ACAMSToday.org or for your copy in the mail.
Christina Bain, visiting researcher, Center for the Study of Europe, Pardee School of Global Studies, Boston University, firstname.lastname@example.org
Joseph Mari, director, Financial Intelligence Unit and External Partnerships, Scotiabank, email@example.com firstname.lastname@example.org
- “The Evolution of Human Trafficking During the COVID-19 Pandemic,” The Council for Foreign Relations , August 13, 2020, https://www.cfr.org/blog/evolution-human-trafficking-during-covid-19-pandemic
- “Education: From disruption to recovery,” UNESCO , 2020, https://en.unesco.org/covid19/educationresponse
- Georgina Thompson, “COVID-19: At least a third of the world’s schoolchildren unable to access remote learning during school closures, new report says,” UNICEF, August 26, 2020, https://www.unicef.org/press-releases/covid-19-least-third-worlds-schoolchildren-unable-access-remote-learning-during
- “INTERPOL report highlights impact of COVID-19 on child sexual abuse,” INTERPOL, September 7, 2020, https://www.interpol.int/en/News-and-Events/News/2020/INTERPOL-report-highlights-impact-of-COVID-19-on-child-sexual-abuse
- “The Effect of COVID-19: Five Impacts on Human Trafficking,” Tech Against Trafficking, 2020, https://techagainsttrafficking.org/the-effect-of-covid-19-five-impacts-on-human-trafficking/
- Livia Wagner and Thi Hoang, “AGGRAVATING CIRCUMSTANCES: How coronavirus impacts human trafficking,” Global Initiative , May 2020, https://globalinitiative.net/wp-content/uploads/2020/06/Aggravating-circumstances-How-coronavirus-impacts-human-trafficking-GITOC-1.pdf
- “Online child sex abuse rises with COVID-19 lockdowns: Europol,” Reuters, May 18, 2020, https://www.reuters.com/article/us-health-coronavirus-eu-crime/online-child-sex-abuse-rises-with-covid-19-lockdowns-europol-idUSKBN22U1XK
- Dustin Racioppi, “’People don’t want to talk about it,’ but reports of kids being exploited online have spiked amid coronavirus pandemic,” USA Today, October 26, 2020, https://www.usatoday.com/story/news/nation/2020/10/22/coronavirus-child-abuse-nj-online-child-exploitation-reports-increase/6004205002/
- Brenda O’Donnell, “COVID-19 and Missing & Exploited Children,” National Center for Missing and Exploited Children , July 16, 2020, https://www.missingkids.org/blog/2020/covid-19-and-missing-and-exploited-children
- “EXPLOITING ISOLATION: SEXUAL PREDATORS INCREASINGLY TARGETING CHILDREN DURING COVID PANDEMIC,” EUROPOL , June 19, 2020, https://www.europol.europa.eu/newsroom/news/exploiting-isolation-sexual-predators-increasingly-targeting-children-during-covid-pandemic
- Louise Donovan and Corinne Redfern, “Online child abuse flourishes as investigators struggle with workload during pandemic,” Telegraph, April 27, 2020, https://www.telegraph.co.uk/global-health/science-and-disease/online-child-exploitation-flourishes-investigators-struggle/
- “FBI Expects a Rise in Scams Involving Cryptocurrency Related to the COVID-19 Pandemic,” FBI, April 13, 2020, www.fbi.gov/news/pressrel/press-releases/fbi-expects-a-rise-in-scams-involving-cryptocurrency-related-to-the-covid-19-pandemic
- “Supplemental Advisory on Identifying and Reporting Human Trafficking and Related Activity,” Financial Crimes Enforcement Network, October 15, 2020, https://www.fincen.gov/sites/default/files/advisory/2020-10-15/Advisory%20Human%20Trafficking%20508%20FINAL_0.pdf
- Jason Nelson, “Pornhub: Now Accepting Crypto Only,” Decrypt, December 14, 2020,
- Christopher Johnson, “How are human traffickers taking advantage of the pandemic?” Reuters, October 17, 2020, https://www.reuters.com/article/us-global-trafficking-expertview/how-are-human-traffickers-taking-advantage-of-the-pandemic-idUSKBN27300T
- “Advisory on Unemployment Insurance Fraud During the Coronavirus Disease 2019 (COVID-19) Pandemic,” Financial Crimes Enforcement Network, October 13, 2020, https://www.fincen.gov/sites/default/files/advisory/2020-10-13/Advisory%20Unemployment%20Insurance%20COVID%2019%20508%20Final.pdf
- “FinCEN Asks Financial Institutions to Stay Alert to COVID-19 Vaccine-Related Scams and Cyberattacks,” Financial Crimes Enforcement Network, December 28, 2020, https://www.fincen.gov/sites/default/files/shared/COVID-19%20Vaccine%20Notice%20508.pdf
- “Beware of Fraudulent Coronavirus Tests, Vaccines and Treatments,” United States Food and Drug Administration , January 4, 2021, https://www.fda.gov/consumers/consumer-updates/beware-fraudulent-coronavirus-tests-vaccines-and-treatments