By a Biometrica staffer
Only yesterday, Dec. 2, Europol announced the results of a massive international law enforcement operation that targeted money mules. The operation, codenamed EMMA 7 (i.e. the European Money Mule Action), involved 26 countries including the U.S., and led to 1,803 arrests and the identification of over 18,000 money mules. It also showed that they were being used to launder money for a wide range of online scams such as sim-swapping, man in the middle attacks, e-commerce fraud and phishing.
Unlike other crimes where individuals get involved in illegal activities knowing what they’re about to do is wrong, what makes money muling dangerous is that regular people can be unknowingly recruited into a criminal operation. In this piece, the first of a mini series, we examine the subject of money muling, including how it is defined by law enforcement organizations, and go into details about the types of money mules per authorities.
What Is Money Muling?
Simply put, per the Federal Bureau of Investigation (FBI), a money mule is someone who transfers or moves illegally acquired money on behalf of someone else. This can happen in various ways. For instance, according to Europol, it can be done when a ‘money mule’ receives money from a third party in their bank account and transfers it to another one or takes it out in cash and gives it to someone else, obtaining a commission for it.
Other methods could include cashier’s checks, virtual currency, prepaid debit cards, or money service businesses. In some cases, money mules may or may not receive a commission. For example, a person may get involved thinking they are doing it for someone else they trust or someone else that they may have a romantic relationship with.
Why do criminals recruit money mules? Again, to put it in simple terms, to create layers of distance between crime victims and themselves and to move money around in an ‘anonymous’ way. According to law enforcement groups, criminals typically do this to help launder proceeds derived from online scams and frauds or even more dangerous crimes like human trafficking and drug trafficking. Europol says: ” … money mules help criminal syndicates to remain anonymous while moving funds around the world.”
While criminal enterprises can lure any individual in as a money mule, they seem to have certain preferred targets for this kind of scam. Per law enforcement, they often target students, those looking for work, or those on dating websites. Targets could also be newcomers to the country (often targeted soon after arrival) and those in economic hardship. In terms of age, Europol says the most likely targets are people under 35 years old, and that recently, criminal groups have begun recruiting younger generations (i.e. those between 12 and 21 years of age).
Some money mules know they’ve been recruited to assist criminal activity, but others become money mules without realizing their activity is benefiting fraudsters, the United States Postal Inspection Service (USPIS) says in a PSA on the issue.
It is, indeed, important to be aware of money muling scams though. Why? According to authorities, “ignorance is not an excuse when it comes to the law and money muling.” Several law enforcement organizations across the world, including the FBI and Europol, have campaigns to raise awareness around money muling scams. You can find more on the topic, and contribute in spreading awareness, by following #DontBeAMule.
How do you know if you are at risk? “If you are moving money at the direction of another person, you may be serving as a money mule,” the FBI says. And doing so is illegal and punishable, even if the person isn’t aware they’re committing a crime.
What happens if someone has been, knowingly or otherwise, money muling for a criminal organization? They could be prosecuted and incarcerated as part of a criminal money laundering conspiracy. Some of the federal charges they could face include mail fraud, wire fraud, bank fraud, money laundering, and aggravated identity theft.
The FBI adds that: Serving as a money mule can also damage a person’s credit and financial standing. Additionally, they risk having their own personally identifiable information stolen and used by the same criminals they are working for, and may be held personally liable for repaying money lost by victims.
Types Of Money Mules
The FBI essentially classifies money mules into three categories. Per the Bureau’s website, they are:
Unwitting or Unknowing
Individuals are unaware they are part of a larger scheme
- Often solicited via an online romance scheme or job offer
- Asked to use their established personal bank account or open a new account in their true name to receive money from someone they have never met in person
- May be told to keep a portion of the money they transferred
- Motivated by trust in the actual existence of their romance or job position
Individuals ignore obvious red flags or act willfully blind to their money movement activity
- May have been warned by bank employees they were involved with fraudulent activity
- Open accounts with multiple banks in their true name
- May have been unwitting at first but continue communication and participation
- Motivated by financial gain or an unwillingness to acknowledge their role
Individuals are aware of their role and actively participate
- Serially open bank accounts to receive money from a variety of individuals/businesses for criminal reasons
- Advertise their services as a money mule, to include what actions they offer and at what prices. This may also include a review and/or rating by other criminal actors on the money mule’s speed and reliability
- Travel, as directed, to different countries to open financial accounts or register companies
- Operate funnel accounts to receive fraud proceeds from multiple lower level money mules
- Recruit other money mules
- Motivated by financial gain or loyalty to a known criminal group
In the next part of this mini series, Biometrica will explore how criminal organizations typically recruit money mules, i.e. their modi operandi, and go into tips on protecting oneself from this type of scam.