A money mule is a person who takes money from victims of fraud and transports it. While some money mules are aware that their actions are supporting illicit activity, others are unaware that their actions are supporting scammers.
Oftentimes, money mules are good people who are tricked into joining the scheme by various means, like social media posts, job offers, or internet classified advertisements. They may be presented with the option to work from home or rapid cash, but in actuality, they are being used as money launderers.
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Money mules are usually instructed to deposit money into their bank accounts, move money to another account, or take money out in cash with a portion of the money kept as reward. The scheme’s perpetrators use a variety of evasive tactics to avoid being discovered, including shifting the funds between multiple bank accounts and adopting false identities.
Money mules who take part in these schemes run the danger of facing severe legal consequences, including fines, jail time, and damage to their credit scores. They could also become the target of ongoing criminal activity and become victims of identity theft or fraud.
The Different Types of Money Mules
Money mules are divided into three groups by the FBI according on their objectives and level of involvement:
- Unaware or unsuspecting money mules
- Scheming financial mule
- Cooperative money mule
Unaware cash Mules are ignorant of their affiliation with a larger illegal organization. Due to their natural tendency to be led by their confidence in the person requesting them to do this, they could also be the victim of social engineering or become victims of catfishing on dating sites.
It is presumed that witting participants are at least somewhat aware that their actions are questionable. What they are required to do worries most people. For instance, opening multiple bank accounts. It’s also possible that they were cautioned—and disregarded—that they are unquestionably involved in an unlawful scheme. As such, they are considered to be “willfully blind” to the fraud.
Complicit money mules are aware of what they are doing and willingly take part in it. They may advertise their knowledge and proficiency with mules. They regularly maintain funnel accounts where they receive money washed by lower-level mules, recruit new members, and conduct mulling rings. Complicit mules are usually charged with more serious offenses since they actively participate in the activity and are aware that it is illegal. This is among the most widely used techniques for money laundering.
What Industries Do Money Mules Target?
Although they are present in many different businesses, money mules are most frequently found in those that handle substantial sums of money transfers, such banking, finance, and e-commerce. Money mules are used by criminals to launder money, and those who work in these sectors or have access to financial systems or bank accounts may be their target.
It is legally required of all businesses covered by anti-money laundering laws to take preventative measures against money mule activity and money laundering in general. For example:
- Constructing financial institutions and societies
- Fintech and investment enterprises
- Brokers of cryptocurrencies and forex
- Real estate agents
- iGaming companies
An entity’s obligation to comply with AML requirements is determined by local legislation. This has to do with organizations that handle the storage, transportation, or assistance of large amounts of cash for individuals or businesses. This isn’t just a bank issue. Scammers who target iGaming websites, for example, often use money laundering schemes.
Alarm Signs
In order to avoid becoming a money mule, consider the following:
- Never agree to transfer or receive money on behalf of someone you haven’t seen in person or don’t know.
- Never take a job that seems too good to be true, especially if it involves shipping or receiving money or merchandise.
- When starting a bank account or a cryptocurrency, don’t do as someone else says.
- Don’t provide money to an online love interest, even if they send it to you first.
- Never pay for the privilege of claiming a reward or sending money to someone else with your “winnings.”
Warning Signs For Companies
- The client declines to provide KYC verification information.
- Money deposited or taken out in a remarkably brief amount of time
- The user keeps checking in from different remote geolocations.
- Significant impromptu trades
- Large amounts of hundreds or thousands of tiny amounts placed and taken out
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How Do Money Mules Get Chosen?
Generally, social media sites like Facebook, Instagram, Snapchat, and even dating apps are used for money mule recruitment. However, it can also occur via word-of-mouth and fraudulent job portals. Online employment adverts from criminals may offer quick money in exchange for performing money transfers between accounts. To lure unwary individuals, they could use alluring employment titles like “financial agent” or “money transfer agent.” These offers, which have an unclear job title, promise a sizable financial reward from the comfort of your home for minimal work and effort. Furthermore, there is no demand for specific financial education or appropriate knowledge. Money mules usually receive the following simple tasks from their “employer” via email:
- Open a bank account or several, and form a company in their name or the name of a business they currently own;
- Take the money out of the bank account, send it to the financial services, and charge a commission based on a percentage.
According to Europol, the most commonly targeted categories are foreign nationals, jobless people, and students from low-income families. According to Europol, organized criminal groups started focusing on younger people, who were usually under 35, specifically those between the ages of 12 and 21. It is easy for thieves to repost fake adverts, even if authorities discover and take down these ads.
Risks and Consequences for Money Mules
Relevant authorities may consider money mulling for third parties—typically affiliated with organized crime groups—to be an aiding and abetting act in major crimes. Money mules may thereby endanger themselves even in the event that they are not aware of the bigger picture. They could therefore still be accused of being criminal accomplices and could be subject to fines and/or jail time.
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Any money mule may face legal action and imprisonment on a number of counts, including wire fraud, bank fraud, money laundering, and aggravated identity theft, according to the FBI.
Working as a Money Mule can negatively impact an individual’s credit score and financial position in the United States, according to the federal government. Money muling may lead to the following consequences, according to UK police:
- cCosure of the money-laundering bank account;
- Inability to get student loans or credit;
- Having trouble getting a phone contract;
- A possible fourteen-year jail term.
When money mules are discovered engaging in these illegal activities, their bank accounts—both fraudulent and non-fraudulent—are usually canceled or frozen, making it harder for them to get credit for things like phone contracts, student loans, and future loan applications. Moreover, it is not unusual for someone to be found guilty; the maximum sentence is 14 years in prison.
Such acts create a stain on criminal records, which has further ramifications. They may also make it harder to secure employment, especially in the data protection industry. This needs to be emphasized more than ever, since nearly every employment in today’s world includes protecting data, including payment information.
Money laundering can compromise a company’s reputation and have an effect on how it operates. It is therefore essential to get in touch with your national Financial Intelligence Unit (FIU), which is in charge of receiving Suspicious Activities Reports (SAR), if you are a firm and uncover money laundering via money mules.
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