What You Should Know About Money Mules

GUEST BLOGGER
Ron Cresswell, J.D., CFE
Research Specialist

The European Union Agency for Law Enforcement Cooperation (Europol) was created in 1998 to combat cybercrime, terrorism and other forms of organized crime. Since 2016, Europol has conducted annual anti-money laundering operations known as European Money Mule Actions, or EMMA. On December 2, 2021, Europol announced the results of EMMA 7, which was conducted from September to November 2021 with the cooperation of 26 countries and multiple law enforcement partners, financial institutions and private-sector businesses.

According to Europol, EMMA 7 resulted in 1,803 arrests and prevented €67.5 million in potential losses. The operation also identified 18,351 money mules. These money mules were used to launder money for various online scams, including sim-swapping, man in the middle attacks, e-commerce fraud and phishing.

As EMMA 7 illustrates, money mules continue to play a key role in international money laundering operations. Accordingly, both Europol and the FBI have recently stepped up their efforts to raise public awareness about money mules and how to avoid becoming one.

What Are Money Mules?

A money mule is a person who transfers illegally acquired funds at the direction of a third party. Money mules generally receive a commission, in either a flat fee or percentage, for moving the money. In the most common type of money mule scheme, the criminal first deposits money into the mule’s bank account. The mule is then directed to transfer the money to another account or to withdraw the money in cash and deliver it to another party. The goal is to obscure the illegal origin of the money.

Types of Money Mules

The FBI classifies money mules into three types:

  • Complicit mules — these individuals know that they are money mules and are complicit in the underlying criminal scheme. They might regularly open bank accounts at different financial institutions, openly advertise their services and recruit other mules.

  • Witting mules — these are people who disregard the warning signs that they are involved in illegal activities. They might have received and ignored previous warnings from bank personnel. Many witting mules began as unwitting mules.

  • Unwitting mules — these individuals do not know that they are involved in a criminal scheme. They might genuinely believe that their activities are helping someone (e.g., their employer, an acquaintance or their romantic partner). Unwitting mules are typically recruited as part of a scam.

How Unwitting Mules Are Recruited

Many unwitting mules are recruited through job offers with promises of easy money or instant cash. In such cases, the potential mule may be asked to open a bank account, a cryptocurrency wallet or a business in their name. The initial communication may be an unsolicited email or instant message, a pop-up ad, or a job posting on social media, an online forum or a job website.

Another common recruiting tool is the romance scam. In a romance scam, a criminal adopts a false online identity to gain a victim’s trust and affection. The criminal then convinces the victim to receive deposits and transfer funds through the victim’s financial accounts. Unwitting mules may also be recruited through extortion or investment schemes.

While anyone can be recruited as a money mule, the most targeted groups include college students, the unemployed, newly immigrated individuals and the elderly.

How to Avoid Becoming an Unwitting Mule

To avoid becoming an unwitting money mule, look for the following red flags:

  • Any request to move money through your bank account in exchange for payment

  • A job offer that asks you to receive company funds into your personal account, or asks you to open a new bank account

  • An employer that claims to be an overseas company seeking a local agent or representative (often to avoid high transaction fees or local taxes)

  • Any job posting that involves transferring money

  • A job posting that is poorly written, vague, does not describe the job duties, or does not include education and experience requirements

  •   An acquaintance or romantic partner who asks you to receive or transfer funds

Money mules can be charged with serious crimes that include substantial fines and long prison sentences. Therefore, any request to accept or transfer funds should be treated with great suspicion.

SOURCE: ACFE Insights – A Publication of the Association of Certified Fraud Examiners