It’s Illegal to Be a “money Mule” Whether You Know It or Not.

In 2022, BioCatch, a software company that provides advanced fraud protection, estimated that there are about two million mule accounts and about $3 billion in fraudulent transfers per year in the US . The same study estimates that scammers reduce their transaction amounts to mules to an average of $1,500 to avoid detection by traditional means. They are also refining their methods by using hybrid bots that allow them to open multiple mule accounts at scale.

What is a money mule?

To understand what a money mule is, you first need to know what money laundering is:

As we said earlier , money laundering is the process by which money obtained illegally, such as from the sale of drugs, looks like it was earned legally.

The money mule is a scapegoat for criminals. The mules end up moving the criminal scheme’s money from one place to another, hence the “mule” part. They usually receive the money and transfer it to another bank account or cede control of their bank accounts to scammers. Obviously giving your parents your bank password so they can move the money is not money laundering – you would need to help someone move the money to make it harder to trace where it came from.

There are different types of money mules, and they all have different consequences depending on their awareness of the criminal act:

• Unwitting Money Mule : An unwilling mule is someone who doesn’t know what he’s doing and doesn’t know he’s part of a crime. They are usually recruited online through “job offers” that appear to be legitimate but are simply paid exorbitant amounts of money to perform tasks such as opening bank accounts “for a company” under their own names. They can also be persuaded through online scams such as the pig butchering scam . Most of these victims are students, job seekers, financially struggling people, or users of dating apps. According to a 2020 Barclays report , the number of people under 21 recruited as money mules more than tripled in the years leading up to the study.
• Angry Money Mule : This is someone who ignores all red flags or pretends not to know that they are part of a money laundering scheme. These people usually start out not knowing, but over time they eventually pick up on the pattern but then continue with it. Sometimes financial institutions give them a warning, but they ignore the warnings or take steps to make themselves look less suspicious.
• Complicity in money laundering : These people are aware of their role and decide to take an active part in money laundering anyway. Some advertise their services and hire others.

How are money mules recruited?

There are four main ways people are recruited as unwitting money mules:

• Remote work : Often these “job offers” promise a lot of money for very little or no effort, but not from legitimate companies or jobs.
• Gamers : Scammers force players to convert their dirty money into in-game currency , and then buy weapons or enhance their avatars with the intention of selling those characters for in-game virtual currency. They are usually sold on secondary markets such as eBay or player auctions. These microtransactions are difficult to detect due to the lack of regulation.
• Dating apps . Fraudsters establish relationships with victims for months or even years. Once they have built enough rapport, they will start asking for “money favors.” (Obviously, don’t send or receive money from someone you just met online, especially if you’ve never met them in person.)
• Lottery “winners” : This is when you can win a contest or lotteries that you have never entered, or you enter one and win immediately. You are instructed to deposit the money that was sent to you into your personal bank account, keep a portion, and send the rest back. These types of scams are called ” prize scams “.

Recognize the red flags of money laundering fraud

If employers use free email services (Gmail, Yahoo, Hotmail, Outlook, etc.), be on the lookout. Most legitimate employers will have their own email domains such as “@lifehacker.com”. Often these job postings are posted on applications that have not been verified for legitimacy, such as Craigslist or Facebook.

If a company or “job” instructs you to open a bank account in your name for any reason, your spider-sense should work as well. The trick is that they usually try to disguise the task as a legitimate company task, but there is no reason for a legitimate business to ask employers to do such things.

If a company gives you money on the condition that you process or transfer the money somewhere else, that is the definition of money laundering. They can offer wire services, mail, Western Union, MoneyGram, PayPal… the list goes on. The scammers will try to lure you in by telling you to keep some of the money.

If a person you’ve formed a relationship with online, but whom you’ve never met in person, asks you to receive or transfer money (this may be disguised as a personal favor or in some other creative way), consider it a wake-up call.

What are the consequences of being a money mule?

It is illegal to be a money mule and you can be prosecuted and jailed as part of a criminal money laundering conspiracy, whether you knew it or not. Depending on what kind of money mule you were and what activities you did for the scammers, you could face federal charges for mail fraud, wire fraud, aggravated identity theft, bank fraud, or money laundering. Not to mention, you are at high risk of having your personal information stolen and used for other illegal activities. Being a money mule can also ruin your credit, and you could be held personally liable for any money the victims lost as a result of the crime.

What to do if you think you are an unwitting money mule

The FBI has advice on what to do if you think you’re being used as a money mule. These include:

• Stop communicating with scammers.
• Stop transferring money or any valuables immediately.
• Document all communications with scammers, including emails, text messages, chats, etc., and keep all physical evidence such as receipts.
• Notify your bank or any other payment system that you used to make transactions.
• Notify law enforcement. You can report suspicious activity to the FBI’s Online Crime Complaint Center (IC3) at ic3.gov and contact your local FBI office .

And always remember that if any job, deal, or online relationship seems too good to be true, it probably is.