The Government Accountability Office looked at how terrorist groups and transnational criminal organizations launder money, engage in human trafficking and move illegal drugs and found that these groups perform phony trade deals, conduct real estate purchases and use virtual currencies to launder the proceeds of trafficking activities.
GAO said Thursday such strategies can involve the use of professional networks for money laundering and service providers in law and other legitimate professions.
Moreover, transnational crime and terrorist groups use electronic means to transmit money or perform bulk cash smuggling across borders.
The report listed several examples of human trafficking-related red flag indicators that have been provided to financial institutions, including frequent receipt or sending of funds through cryptocurrency, frequent customer transactions from various U.S. geographical regions and customer accounts sharing a telephone number or other identifiers with escort agency websites.
The congressional watchdog also found that federal agencies have launched efforts to counter money laundering and trafficking activities.
The Financial Crimes Enforcement Network at the Department of the Treasury, for instance, facilitates information sharing with over 160 financial intelligence agencies overseas and works with law enforcement agencies to share data on trafficking-related “red flags” with financial institutions.
“FinCEN also coordinates a voluntary program that allows financial institutions to share information with one another to better identify and report suspicious activities that may be related to money laundering or other illicit financing,” the report reads.
On Jan. 27, the Potomac Officers Club will bring together distinguished government and industry leaders to offer the GovCon community an insight into the national security aspect of digital currencies.
POC’s Digital Currency and National Security forum will feature National Cyber Director Chris Inglis as the keynote speaker.