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Opinion: Texas should target ATMs used in sex trafficking

Austin American-Statesman logo Austin American-Statesman 5/8/2021 By Bob Sanborn and Caroline Roberts
a hand holding a knife: Human Trafficking photo illustration to Ahora Si feature story. © Photo illustration by FOTOLIA Human Trafficking photo illustration to Ahora Si feature story.

Human trafficking is one of the most illicit yet lucrative industries in the world. One of the largest human trafficking cases in Texas involved Hortencia Medeles, a Houston woman who was convicted in 2015 of sex trafficking and money laundering charges. According to trial documents, Medeles’ profits exceeded $1.6 million in just 19 months. The financial incentive for the soulless to exploit the vulnerable is clear.  

To help end human trafficking, our laws must ensure that traffickers cannot profit. Texas can start by passing House Bill 2629 by Rep. Senfronia Thompson, D-Houston. HB 2629 disrupts the system by requiring white-label ATMs, which are privately owned and not affiliated with any bank, to be registered with the state.

ATMs serve an essential function, particularly in underbanked communities. However, traffickers have exploited our state’s lack of oversight for too long. Registering these ATMs would 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.

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In Texas, nearly 900 illicit massage business are suspected fronts for prostitution and human trafficking. Make no mistake, some are organized criminal activity, involving multiple people 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 illicit massage businesses are cash-only businesses. To capitalize on this arrangement, the operators purchase private, white label ATMs to use on the premises. Unlike ATMs owned by banks, these white-label ATMs have little oversight — they can be owned and operated by anyone — and are not subject to the extensive regulations that apply to financial institutions. Illicit massage businesses stock their ATMs with cash made through human trafficking. Male customers appreciate the convenience of these ATMs because a generic business name is recorded on their credit card statement when they pay for these activities.

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 paperwork 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, the true owners are likely involved.

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Passage of HB 2629 would yield tremendous results. The bill would require the owners of white-label ATMs to tell the state who they are and where their machines are operating. Registration occurs once, and an operator's fees are capped at $200, regardless of how many machines he or she registers.

This low burden of registration would allow law enforcement to quickly identify those who actually profit from human trafficking. Once law enforcement has a legitimate person of interest, they could 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. Texans should urge their representatives to pass HB 2629. Stronger laws around financial crimes will enable law enforcement to cut off the head of the snake instead of chopping at its tail.

Sanborn is president and CEO of Children at Risk, a Texas-based nonprofit focused on research and advocacy for children. Roberts is an attorney with the nonprofit.. 

This article originally appeared on Austin American-Statesman: Opinion: Texas should target ATMs used in sex trafficking

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