TBML Spotlight - San Diego

An Introduction to the spotlight series

Trade-Based Money Laundering (TBML) often feels abstract — complex transactions, manipulated invoices, shell companies. But behind these financial crimes lie very real human consequences. The TBML Spotlight aims to examine places where the impact of illicit finance intersects with exploitation, trafficking, and community harm. It will explore places you might expect to harbour TBML — major ports, border cities, financial hubs — as well as those you might not, where the human impact quietly unfolds in unexpected ways.

We start in San Diego — a major trade hub, and a city where trafficking and laundering frequently converge. It’s also home to individuals and organizations working to disrupt these patterns through legislation, enforcement, and technology. By showcasing these efforts, we aim to illustrate not just the problem — but the progress being made by those who are building solutions.

Why San Diego Matters

San Diego is best known for its sunshine and seaports — but beneath the surface, it has become one of the United States’ most serious human trafficking hotspots. The FBI ranks San Diego among the top 13 worst regions in the country for human trafficking, with research suggesting between 8,830 and 11,773 victims of sex trafficking in San Diego County each year.

The scale is staggering. A 2016 report by the University of San Diego and Point Loma Nazarene University estimated that sex trafficking generates up to $810 million per year in the region — making it San Diego’s second-largest underground economy, behind only drug trafficking, which generates an estimated $4.76 billion annually.

“The average age of entry into sex trafficking in San Diego is just 16 years old.”
— San Diego County Board of Supervisors, 2025

This economic footprint isn’t just large — it’s hidden. Traffickers rely on complex laundering methods to disguise their earnings. Among the most powerful of these methods is Trade-Based Money Laundering (TBML) — the manipulation of trade transactions (e.g., invoices, shipments, customs data) to move illicit profits undetected. San Diego’s position as a cross-border trade hub makes it a prime environment for TBML to thrive.

“The growth of trade has been facilitated by steps which can make it difficult to monitor activity, such as the establishment of free trade zones.”
— Dennis Lormel, Former Chief, FBI Terrorist Financing Section

With major shipping terminals, a thriving logistics sector, and complex international trade links, San Diego offers traffickers not just a market but a means to clean the money. Through tactics like over-invoicing or phantom shipments, laundered proceeds from trafficking can be integrated back into the economy disguised as legitimate trade.

A Convergence of Trade and Trafficking

Several risk factors converge uniquely in San Diego:

Border proximity: San Diego County shares a border with Mexico that is approximately 15 miles long, running from the Pacific Ocean eastward to the Otay Mesa area. The San Ysidro Port of Entry, located in the San Ysidro district of San Diego is the busiest land border crossing in the Western Hemisphere. Approximately 70,000 northbound vehicles and 20,000 northbound pedestrians cross into the United States each day.
Port activity: High volumes of legitimate trade that come through San Diego’s ports provide cover for suspicious shipments.The Port of San Diego handles approximately 2.9 million metric tons of cargo annually and processes around 823,560 containers (TEUs) per year. San Diego’s Otay Mesa Port of Entry processes over 1 million commercial trucks per year, offering traffickers and launderers cover within the noise of legitimate cross-border commerce.“

“High-volume cross-border trade provides cover for financial crime when oversight is stretched thin.”
— Voice of San Diego

Transnational Gangs and Cartel Influence: San Diego is a frontline city in transnational organized crime. Criminal groups operating between San Diego and Tijuana engage in drug trafficking, sex trafficking, and the laundering of proceeds through trade and financial channels. These groups are known to control shell companies and exploit both formal and informal trade systems.

“Drug and human trafficking in San Diego are deeply intertwined, often facilitated by the same criminal infrastructure.”
— Homeland Security Investigations, 2024

Tourism and Hospitality Industry: San Diego welcomes over 35 million visitors annually, fueling demand for commercial sex and creating low-visibility, high-turnover employment sectors (hotels, bars, restaurants). These industries are frequently targeted by traffickers and used as cover for both labor exploitation and front businesses involved in laundering.

“The anonymity and flow of tourists create ideal conditions for traffickers to operate unnoticed.”
— San Diego City Attorney’s Office

Military Presence and Transient Population: San Diego is home to over 100,000 active-duty service members, many of whom are young, single, and living away from home. This dynamic — combined with high disposable income — has been flagged in research as a demand-side driver of sex trafficking.

“San Diego’s military culture and port economy make it particularly vulnerable to underground sex markets.”
— NIJ Report on Gangs and Sex Trafficking in San Diego

Tribal vulnerability: Although Native Americans make up less than 1% of the population, they are disproportionately targeted — especially in and around San Diego’s nine tribal casinos

“While Native Americans make up less than 1% of the county population, they continue to be victimized by sex trafficking at rates significantly higher than other racial groups.”
— Long-Standing Epidemic of Sex Trafficking in San Diego Tribal Communities

Local Action Against a Global Crime

San Diego’s human trafficking crisis has not gone unnoticed. While the city faces complex risks — from cartel routes to trade corridors — it’s also home to a growing network of people and organizations working to disrupt the systems that allow exploitation to flourish. Some focus on support for survivors. Others push for legal reform. Still others, quietly, are building the infrastructure to detect and dismantle the financial flows that make trafficking profitable.

This is where local meets global.

Legislative Leadership: The Survivor Support and Demand Reduction Act

In April 2025, the San Diego County Board of Supervisors voted to support AB 379: The Survivor Support and Demand Reduction Act — a landmark piece of legislation championed by Supervisor Jim Desmond. The bill closes a legal loophole that previously allowed buyers of sex from 16- and 17-year-olds to be charged only with misdemeanors.

“San Diego is a known hotspot for human trafficking, and we’ve now taken a powerful stand to protect our most vulnerable — our children.”
— Supervisor Jim Desmond

The act goes further. It makes the purchase of sex from any minor a felony and establishes a Survivor Support Fund, financed by offender fines, to provide:

Safe housing
Trauma recovery
Job training and counselling for trafficking survivors

This represents a shift in how the justice system views victims — not as criminals, but as people exploited for profit, often through complex networks that include financial and trade infrastructure.

Community-Led Intervention: The Bilateral Safety Corridor Coalition

Headquartered in San Diego, the Bilateral Safety Corridor Coalition (BSCC) is a cross-border alliance of over 60 agencies dedicated to combating human trafficking. Working on both sides of the U.S.–Mexico border, BSCC:

Operates victim shelters and safe houses
Conducts outreach to at-risk communities
Trains law enforcement and prosecutors on trafficking detection and trauma-informed care

BSCC is particularly known for identifying victims hidden in informal labor networks or moved through legitimate-appearing trade environments — a pattern that mirrors TBML dynamics. Their cross-border approach mirrors the very methods traffickers use — but in reverse: cooperation, visibility, accountability.

Innovation Behind the Scenes

While legislation and NGOs often take the public spotlight, some of the most impactful change happens behind the scenes — in technology platforms, analytics, and financial controls. Across San Diego, efforts are underway to apply advanced tools to flag trade irregularities, identify trafficking-related financial flows, and expose suspicious trade behavior hidden in plain sight.

These efforts aren’t always visible — and they aren’t branded. But they reflect a wider recognition that to disrupt trafficking, you must also disrupt the money.

TBML as an Enabler of Exploitation

What links trade, money laundering, and modern slavery? Often, it’s TBML. When traffickers launder proceeds through fake shipments or over-invoiced goods, they not only fund their networks — they make the victims invisible.

“The aim of trade-based money laundering is not the movement of goods, but the movement of money.”
— Financial Action Task Force (FATF)

How TBML Enables Trafficking

When a trafficking network generates illicit revenue — whether from forced labor, sexual exploitation, or coercive recruitment — it must move and disguise that money. Trade is one of the most effective tools for doing so.

Examples include:

Phantom shipments from shell companies used to justify large cross-border payments
Over-invoicing for services like “labour supply” to disguise the true nature of payments
Shell corporations set up in secrecy jurisdictions to hide ownership and profits

In one case uncovered near Los Angeles, a Thai–U.S. trafficking ring used businesses and banks to funnel over $20 million in proceeds through structured remittances and trade-linked transactions

These aren’t theoretical risks — they’re live threats operating at the intersection of finance, trade, and human harm.

A Paper Trail With Real Consequences

Unlike cash smuggling or informal value transfer, TBML creates legitimate-looking records: shipping documents, invoices, wire transfers. This makes it harder to detect — but also leaves a digital footprint that can, with the right tools, be traced.

“One of the most effective ways to identify instances and patterns of TBML is through the exchange and subsequent analysis of trade data for anomalies that would only be apparent by examining both sides of a trade transaction.”
— U.S. Department of Homeland Security

According to Global Financial Integrity, 43% of known TBML cases have been linked to predicate offenses like drug and human trafficking. These financial flows not only launder profits — they reinforce the very networks that facilitate exploitation.

“In terms of the underlying criminal activity that generated laundered proceeds (i.e the predicate offenses), the most common included drug trafficking (43 percent of all predicate offenses mentioned), tax evasion/tax fraud (18 percent), other fraud or scams (7 percent) and corruption (6 percent).”
—Trade-Based Money Laundering: A Global Challenge – GFI 2023

Disruption Begins With Detection

Stopping TBML isn’t just a financial compliance issue. It’s a form of intervention — a way to cut off the funding that keeps trafficking networks alive. That’s why governments, NGOs, and tech providers are investing in:

AI tools to detect red flags like mismatched trade values, vague service descriptions, or trade between unrelated counterparties
Public–private partnerships to share suspicious trade data across banks, shipping firms, and customs authorities
Capacity building in frontline countries where under-invoicing or shell company abuse is widespread

As one analyst put it:

“When you disrupt TBML, you don’t just seize money. You shrink the criminal ecosystem that makes trafficking possible.”

What You Can Do?

Trade-Based Money Laundering isn’t just a financial crime — it’s a human one. By masking the proceeds of trafficking and exploitation, TBML helps criminal networks thrive in the shadows of global commerce.

But it can be disrupted. With better detection, stronger laws, and coordinated effort, the flow of illicit money can be traced, flagged, and stopped — cutting off the profits that fund abuse.

➤ Learn the Red Flags

Explore how TBML works and the warning signs to look for — whether you’re in trade, finance, policy, or simply curious.

➤ Share What You’ve Learned

TBML is still one of the least understood forms of money laundering. Help change that. Share this spotlight or start a conversation.

➤ Connect With Change-Makers

Whether you work in compliance, law enforcement, technology, or survivor support — collaboration is key. If your work touches on TBML or trafficking, get in touch and tell us what you’re doing.