A money mule is someone who accepts and moves money from fraud victims. Some money mules are aware that they are aiding in illegal activity, but some are not aware that what they are doing is aiding fraudsters.
What are Money Mules?
Money mules are frequently innocent individuals who are drawn into the plan by a variety of tactics, such as job offers, online classified ads, or social media postings. They can be offered quick cash or a true opportunity to work from home, but in reality, they are being utilized to launder money.
Typically, money mules are given instructions to receive funds into their bank accounts, transfer the funds to another account or withdraw the funds as cash while keeping a portion of the funds as compensation. The perpetrators of the scheme employ a number of strategies to evade detection, such as moving the money via several different bank accounts or assuming fictitious identities.
Money mules who participate in these operations risk harsh legal repercussions, such as jail time, fines, and harm to their credit ratings. Also, they might become the focus of persistent criminal activities and fall victim to fraud or identity theft.
What Are the Different Types of Money Mules?
The FBI categorizes money mules into three categories based on their goals and degree of involvement:
- Unknowing/unwitting money mules
- Witting money mules
- Complicit money mules
Unaware money mules are unaware they are part of a broader criminal enterprise. They could also fall prey to catfishing on dating sites or be recruited online using social engineering because they are typically driven by the confidence they have in the person asking them to do this.
Participants in witting are assumed to be somewhat conscious that what they are doing is suspect. Most people are worried about what they are asked to do. For example, to create several bank accounts. They may also have been warned that they are most certainly engaging in an illegal plan, which they ignored. They are therefore regarded as being "willfully blind" to the scam.
Money mules that are complicit in crime know what they are doing and voluntarily participate. They might promote their expertise and experience with mules. They frequently operate mulling rings, recruit new members, and run funnel accounts where they get cash washed by lower-level mules. Due to their active participation and awareness of the illicit nature of the activity, complicit mules are typically charged with more 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 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.
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
- The customer refuses to submit KYC verification checks
- Money deposited/withdrawn in an unusually short period of time
- The user continues to log in from various distant geolocations.
- Large unplanned transactions
- Hundreds/thousands of small sums deposited and withdrawn in large quantities
How are Money Mules Selected?
Recruiting for money mules typically takes place on social media platforms like Facebook, Instagram, Snapchat, and even 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. 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.
The most frequently targeted groups, according to Europol, are foreigners, the unemployed, and financially disadvantaged students. Europol said that organized crime groups began to target younger generations (those between the ages of 12 and 21), who were typically under the age of 35. Even if authorities find and remove these posts, it is simple for crooks to repost false advertisements.
What are the Risks and Consequences for Money Mules?
Money mulling for third parties, usually belonging to organized crime organizations, may be viewed as aiding and abetting serious crimes by relevant authorities. As a result, money mules can put themselves in danger even if they are unaware of the overall scheme. As a result, they may still be charged as accomplices in a crime and face fines and/or prison sentences.
According to the FBI, any money mule may be prosecuted and imprisoned on various charges such as wire fraud, bank fraud, money laundering, and aggravated identity theft.
In the United States, the federal agency adds that working as a Money Mule can harm a person's credit score and financial standing. According to police in the United Kingdom, Money Muling may result in the following penalties:
- Closure of the bank account used for money laundering;
- Difficulties obtaining credit or student loans;
- Difficulties obtaining a phone contract;
- A maximum prison sentence of fourteen years.
Money Mules who are caught in these criminal activities find it difficult to obtain credit, such as for phone contracts, student loans, and future loan applications, since all of their bank accounts (fraudulent and non-fraudulent) are frequently closed or frozen. Furthermore, being convicted is not uncommon; individuals can face up to 14 years in prison.
Such actions leave a mark on criminal records, which has additional consequences - they can also make it more difficult to find work, particularly in the field of data protection. It is critical to emphasize this, especially since almost every job nowadays involves data protection, such as payments.
Money laundering can have an impact on business operations and jeopardize its reputation. As a result, if you are a business and discover money laundering via money mules, the next best step is to contact your national Financial Intelligence Unit (FIU), which is in charge of receiving Suspicious Activities Reports (SAR).