Child trafficking in plain site

Richard Simms explains how you could unwittingly be facilitating organised crime, including money laundering and child trafficking

If someone asked you whether your firm might be helping a trafficker launder money, you’d probably say no. And you’d mean it. You’ve done your training. You carry out your client checks. You know the rules. Besides, child trafficking is the stuff of documentaries and criminal trials. Not the kind of thing that starts with a polite man in his thirties walking into your office asking for help registering a company.

But this is exactly why it works. In most cases of child trafficking, the profits don’t need to be smuggled or stacked in suitcases. They just need to be presented well enough that someone like you helps move them into the legitimate economy.

And that someone is almost always a regulated professional. Not corrupt. Not careless. Just busy, trusting and trying to get the job done.

The exploitation is happening but you’ll never see it

The UK’s National Referral Mechanism received over 7,000 child referrals in 2022 alone, which accounted for nearly half of all modern slavery referrals that year. Many of these children are British.

A significant proportion are being exploited by criminal gangs to commit crimes: running drugs across county lines, cleaning cannabis farms, working in informal brothels or nail bars, begging, or fraudulently claiming benefits.

To the outside world they may look like troubled teens, undocumented workers or young people in low-paid roles. But to their exploiters, they are an asset class. Replaceable. Disposable. Profitable.

Each act of exploitation, every drug drop, every coerced sex act, every day washing cars without pay, brings in cash. But cash has limitations. It’s awkward to dispose of, and eventually becomes too dangerous to hold. That’s when it’s time to turn it into something clean. Something that can move through banks, fund property deals, be reinvested.

And that’s where you come in.

Ask no questions

You’re approached by a prospective client who wants to register a limited company. Perhaps it’s a small beauty business. A courier operation. A cleaning service. You run a few checks: their ID matches, they have a registered office (albeit virtual), and they’ve filled out your forms without a fuss.

They say they’re just getting started, or they’re looking to get things organised now that business is picking up. You’ve heard this dozens of times and take them on as just another new client.

The financials will be mostly cash-based, they tell you. Some of it might be subcontracting, some consultancy, some ‘community work’. It’s irregular. As the relationship progresses, it’s clear they’re not great with invoices. But they’re polite, prompt and responsive.

They ask for your help preparing the first year’s accounts. The turnover’s healthy. You spot that there are no real staff costs, but they say they pay in cash or use casual labour. Again, not ideal… but not out of the ordinary for their type of business.

Cleaning the cash

You don’t see the child who was trafficked across county lines to run drugs. You don’t see the girl working unpaid hours in the back of a high street salon. You don’t see the teen whose benefits are claimed under a false name.

You see cash income. Bank transfers. A rudimentary spreadsheet. You ask about source of funds, and they say it’s from ‘private clients’, ‘small jobs’ or ‘service fees’. There are no contracts. No audit trail. But you’ve seen plenty of small businesses operate informally in their early years. You prepare the accounts, submit the CT600, maybe help with VAT registration. The business is now official, on paper. You’ve done your job.

But that cash, originating in criminal exploitation, is now inside a company bank account. And every filing you assist with adds a layer of legitimacy.

Your credibility is key

You’re the gatekeeper. When you onboard a client, submit documents or sign off financials you’re lending your professional weight. Banks, HMRC and regulators assume due diligence has been done. Your involvement says, “this business has passed the checks”.

The trafficker knows this. They don’t need you to skip steps. They just need you to apply them routinely, treat them like any other client and accept their story, because it fits a pattern you’ve seen before.

You won’t hear from the people being exploited. You’ll hear from the trafficker, the one with a calm manner, and just enough paperwork to keep the process moving.

Once inside the financial system, the money can be layered. It might be paid to the director as a salary or distributed as dividends. Or moved to another company as a ‘loan’. It might be used to rent commercial property, buy a van or transfer to a crypto exchange.

Each transaction adds distance between the crime and the cash. And every time you’re involved, advising on tax, preparing a cash-flow forecast, filing a confirmation statement, you’re helping reinforce that façade. You’re fulfilling your brief. You’re applying the processes as you understand them. But in doing so, you’re smoothing the path for money generated through the exploitation of children.

Staying under the radar If it works once it’ll work again. The trafficker sets up more businesses. Different names, different sectors, different addresses. Each one small, unremarkable and plausible.

They may use other professionals, too: estate agents to secure premises, solicitors to set up partnerships, or tax advisers to apply for reliefs. But you might be the constant: the person who helped launch the first company and now handles its annual filings.

Nothing about your work raises concern. The businesses are modest. The filings are timely. The client is compliant. But behind the scenes, the network is expanding. More children are being drawn in. More cash is being generated. And your work is part of how it gets recycled into the mainstream economy.

Then someone starts asking questions. Perhaps a victim or member of the public reports what’s happening. Or perhaps a bank flags the business for unusually structured deposits. Suddenly, your filings are part of the investigation. Your due diligence files are requested. Your SAR register is reviewed. You’re asked what risk assessment you performed. What questions you asked about source of wealth. Why you didn’t escalate anything.

You explain that the client seemed credible. That the paperwork was provided. That you had no obvious reason to suspect anything. And that might be true. But it might not be enough.

Under the Proceeds of Crime Act, a failure to report suspicious activity when a reasonable professional should have can carry legal and regulatory consequences. And “they didn’t seem suspicious” isn’t going to be a defence – unless you’ve got the audit trail to back it up.

Making the difference

You don’t need to see abuse or hear confessions to take action. You need to notice what doesn’t fit. And act on it. That might mean:

• Asking for actual evidence of how the business generates revenue.

• Applying enhanced due diligence to vague or cash-heavy business models.

• Reviewing your risk assessment template to make sure it reflects real-world red flags.

• Using tools that track PEPs and sanctions, and flag unusual patterns in client data.

• Making sure AML policies are tailored to your business, not copied from someone else’s file. Above all, it means being willing to challenge stories that sound convenient but lack substance.

This is happening now

Traffickers don’t need to hack the system. They just need to use it as it is. They rely on gaps in process. On rushed onboarding, over-reliance on standard ID checks and on the human instinct to believe someone who seems polite, respectful and organised.

But you can make yourself harder to use by embedding AML into your workflow. Not as a tick-box exercise, but as a live, thinking process. One that adapts as risks change. One that gives you the confidence to ask hard questions, and the tools to record and escalate what you find.

• Richard Simms, Founder and Director of AMLCC