The Dark Side of Easy Money: Understanding Money Mule

Money mules are those who intentionally or non-intentionally transfer illegally obtained money through their bank account. They are like intermediates used by criminals for money laundering.

Generally, money mules are allured in the schemes of earning instant money via lottery or part of networking marketing. Most of the time these mules don’t know that the money they are getting in their bank account is illicit and obtained illegally from online frauds.

Currently, money mules are rising tremendously which is alarming for everyone, especially for the bank and financial institutions. Financial Institutions and banks can prevent themselves from money mulling and reputational damage, by taking some strict action to detect and prevent it.

In this blog, you will learn everything about money mules, types, red flags, and protection tips.

Money Mule Means

A money Mule means, a person who is used as a pawn through a criminal organization to settle down illegally obtained money. They willingly or unwillingly become a part of Money mulling activities. The illegally obtained money flow from their bank account helps hide its source of origin.

What is a Mule Account?

A mule account is a bank account used by person to receive and transfer illegal money for criminals. Many mule accounts add a layer of concealment to hide the source of funds, making it difficult to trace. Criminals often hire multiple people and create a chain of mule accounts, which forms an undetectable network.

Types of Money Mules

Unwitting Money Mule

It is a term used for people who are unaware that they are part of illegal activities. They usually get tricked by online dating and fake job offers. When they get lured by a trick, they are asked to receive money in their bank account.

As part of the process, the person is guided to keep some money and transfer the remaining money. 

Witting Money Mule

These people notice signs of fraud but willingly ignore them. In some cases, they got warned by bank staff about suspicious activity. They get lured by money but don’t want to admit they are part of the crime. Most of the time they become part of it unwittingly but continuously participate due to money.

Complicit Money Mule

People under the complicit category know that they are part of illegal activities. They open bank accounts to receive illegally obtained money. They travel to foreign countries to open bank accounts and businesses. They handle large sums of money and recruit others to do the same. They generally are lured by loyalty and money from a criminal group.

How Criminals Recruit Money Mules?

Criminals use the following means to hire some as a mule

Romance Scam: In a romance scam a criminal builds a romantic relationship and asks their partner to receive and transfer money for them. Due to trust and blind love, people become part of it.

Work From Home Jobs: We can see work-from-home job advertisements online. Here fraudsters manipulate people by saying that they need to handle the transactions and payment process.

Messaging Job Seekers directly: In this scam, criminals message directly to job seekers via job search platforms. They offer high-paying jobs that require managing financial transactions, but it is money mulling.

Spam Phishing Emails: Criminals sent phishing emails to job offering title. They mentioned that this is a simple job that requires minimal effort. These job offers are with urgent titles that force individuals to apply for them.

Non-profit scams: Money launders approach non-profit and charitable organizations by providing money as donations. Their well-targeted organization is those who are in crisis so they can immediately convert to save themselves.

Debt relief scams: The prime target of criminals for money-mulling schemes are people, who face financial crises. They get lured by the criminals as a helping hand that will clear out their debts, but they need to be part of the transaction.

These are some common scams that are used by criminals to hire people. They can use other schemes also to convert into a mule.

Red Flags of Money Mules In Banking

Money mulling is rising day by day which is alarming. Banks and financial institutions should take it seriously and find suspicious money mule accounts. Here are the warning signs which help in detection.

• Suspicious access from different locations: transactions are made from various remote locations or through a VPN.
• Irregular deposit and Withdrawal: sudden money received in the bank account of a person and then withdrawn in a short period.
• Hesitating in providing KYC information: Customers who are unwilling to share their updated KYC or identity verification details should be investigated.
• Transactions to high-risk countries: Sending and receiving money from risky areas and countries that are on AML alerts.
• High-value transaction: Regular transactions of huge money are a clear indication that something is going wrong.

Consequences of Being a Money Mule

You can face the following consequences if you are involved in money.

• Legal penalties: if you are found guilty, you might have to pay large fines or maybe sent to prison.
• Criminal Charges: You can face criminal charges for moving illegal money, even if you do not know it is illegal.
• Legal Responsibility: even if the suspect does not know that he is part of an illegal scheme, the suspect will be responsible and help the police in the investigation.

Tips to Protect Yourself

To avoid becoming a part of Money laundering, you should follow these tips.

• Thoroughly research job openings whether they are from a legit company or not.
• Don’t use your personal bank account to transfer money on behalf of others.
• Be cautious in building online relationships and never receive or transfer money for someone you met online.
• We are aware of red flags like pressure to act immediately.
• Do not share your personal information with people.

What to Do if You’re a Money Mule?

If you find that you are part of money mulling you should take these steps

• Stop transactions whether it is receiving or sending money.
• Inform your bank or financial institution. They will monitor and detect the money mule account with the Money mule Detection API.
• Report to financial crime agencies and local law enforcement.
• Gather all evidence including emails, and transaction details.
• Consult legal professionals they will guide you.

FAQs

1. What is another name for Money mule?

Smurfer is used as another name for money mule.

2. Who are money mules in Banking?

They are persons who allows to send and receive illegally obtained money from their bank account and keep a little bit for themselves.