What is a Money Mule?

A money mule is a person who transfers illegally obtained money on behalf of criminals, usually through their own bank account, in order to conceal the origin of the funds. Mules may act knowingly or unknowingly and are often paid a small commission. They are a key link in the money laundering process, because they separate stolen money from the crime that produced it.

Financial institutions, such as banks, catch mules by monitoring for suspicious activity, such as rapid transfers after large deposits. For compliance to AML regulations, businesses must always be on the lookout for money mules. 

How Does Money Muling Work?

Money mules are part of a broader money laundering process that involves three stages. Criminals use money mules to conceal the origins of illicit funds through various transfers. The process works as follows:

1. Placement: Illicitly obtained money is introduced into the system by depositing it into a bank account or other financial service through a money mule.
2. Layering: The mule moves the money through a series of transactions, often between multiple accounts, to conceal its source. This step makes it difficult to trace the source of the funds.
3. Integration: The now "clean" money is returned to the criminal, appearing legitimate and ready to be used.

What Are the Different Types of Money Mules?

The FBI categorizes money mules into three categories based on their level of awareness: Unwitting, witting and complicit.

• Unknowing/unwitting money mules
• Witting money mules
• Complicit money mules

Unwitting mules are usually victims of a romance or job scam and act on trust. Witting mules are wilfully blind: They have been asked to do something they know is suspect, such as opening several bank accounts, and have chosen not to ask questions. Complicit mules are the operational core of a mule network. They run funnel accounts that collect money from lower-level mules, recruit new members and, because of their active role, face the most serious charges.

What Industries Do Money Mules Target?

Money mules can be found in a variety of industries, but they are most commonly found in industries involving large amounts of money transfers, such as banking, finance, and e-commerce. Criminals using money mules as a way of washing money may target people who work in these industries or have access to bank accounts or financial systems.

All companies subject to anti-money laundering legislation are required by law to take precautions to avoid money mule behavior and money laundering in general. For instance:

• Building societies and financial entities
• Investment firms and fintech
• Forex and cryptocurrency brokers
• Estate brokers
• iGaming businesses

Local legislation determines whether an entity must adhere to AML regulations. This relates to entities that store, move, or assist in the movement of huge sums of money by people or enterprises. This is not limited to banks. For instance, money laundering scammers frequently target iGaming websites.

Who are the Most Targeted Victims?

According to Europol, recruiters most often target people under 35, including minors, along with the unemployed, students, people in economic distress and newcomers to a country. Organized crime groups choose these groups because they are more likely to need money quickly, less likely to recognise the warning signs and less likely to have a long banking history that would make unusual activity stand out.

In practice, the profiles that appear most often in mule cases are:

• Job seekers and the unemployed, approached through fake job ads
• Students and young people, often through social media and messaging apps
• People in financial difficulty, including small business owners under financial stress
• Newcomers to a country who may not yet understand local banking rules
• Retirees and customers with cognitive impairment, who are more vulnerable to pressure
• Frequent gamblers and users of games of chance, who are used to moving money quickly

What are the Red Flags of Money Mules?

To prevent becoming a money mule, follow these suggestions:

• Never consent to receiving or sending money for someone you don't know or haven't met in person.
• Never accept a job that offers quick money, especially one that includes shipping or receiving cash or goods.
• Don't follow someone else's instructions while opening a bank or cryptocurrency account.
• Even if an internet love interest sends you money first, don't pay money to them.
• Never pay to claim a reward or transmit money to someone else using your "winnings."

Red Flags For Businesses

For banks, payment firms and other regulated businesses, mule activity shows up in how an account is opened and how money moves through it. The signals below rarely prove anything on their own, but each one should trigger a defined response rather than a note in the file.

The "what to do" column is only the first step. A detailed guide to how banks detect mule accounts, including onboarding, behavioral and network signals, is covered in our money mule detection article.

How are Money Mules Selected?

Recruiting for money mules typically takes place on social media platforms and messaging apps such as Instagram, TikTok, Snapchat, Telegram, WhatsApp and Discord, as well as Facebook groups and dating websites. Nevertheless, it can also happen through word of mouth and phony recruitment websites. Criminals may post job ads online, promising easy money for a job involving money transfers from one account to another. They may use enticing job titles such as "money transfer agent" or "financial agent" to entice unsuspecting people. These offers, which carry an ambiguous employment title, advertise a large financial reward from home for little work and little effort, and there is no requirement for relevant expertise or specialized financial education.  Even when platforms and authorities find and remove these posts, it is simple for recruiters to repost them under a new name.  The tasks that money mules typically get by email from their "employer" are straightforward:

• Create a firm in their name or the name of one they already own, and open one or more bank accounts;
• Get the funds from the bank account, transfer them to the financial services, and take a percentage as a commission.

What are the Risks and Consequences for Money Mules?

Moving money for third parties, who are usually organized crime groups running a wider financial crime scheme, can be treated by the authorities as aiding and abetting a serious crime. Money mules therefore expose themselves to prosecution even when they do not understand the overall scheme, and can be charged as accomplices and face fines or prison.

The consequences differ by jurisdiction, but the pattern is the same in the United States and the United Kingdom:

A conviction also leaves a mark on the criminal record, which makes it harder to find work, particularly in roles that involve handling payments or customer data.

How Do Money Mules Get Caught?

• Suspicious Banking Activities: Banks and financial institutions monitor for unusual or suspicious financial transactions, such as large cash deposits followed by immediate wire transfers.
• Law Enforcement Investigations: Police and other law enforcement agencies may launch investigations into money mule networks, tracking down and apprehending individuals involved in illegal money laundering activities.
• Company Reports: Companies targeted by money mule schemes may report suspicious activities to law enforcement, leading to the identification and capture of the money mules involved.
• Electronic Paper Trails: Electronic trails, such as IP addresses used in online transactions, can be used to track down money mules and gather evidence of their involvement in illegal activities.
• Tips and Informants: Tips from informants or whistleblowers can also lead to the identification and apprehension of money mules involved in criminal activities.

The scale of enforcement is significant. In the ninth European Money Mule Action, EMMA 9 (2023), coordinated by Europol with Eurojust and the European Banking Federation, law enforcement identified 10,759 money mules and 474 recruiters and herders, with 1,013 people facing criminal proceedings and 2,822 banks and financial institutions taking part.

Sanction Scanner can help businesses detect and prevent money mule activities by providing comprehensive AML solutions. Our real-time transaction monitoring and sanction screening tools can identify suspicious behavior, such as unusual transfers and patterns commonly linked to money mules.