Money Mule Scams: How Unsuspecting People Help in Moving Illegal Money

Who is a money mule? Any person who unknowingly participates in receiving and transferring illegal funds. Such funds are usually from cybercrime, drug trafficking and any other illegal business. Hence, they cannot be banked normally because they will be tracked by authorities. The goal is to keep this money from being flagged as illegal money by banking systems’ fraud detection mechanisms.

Money mule scams help criminals and scammers to move their money through the banking system undetected. This is done by getting unwitting students, jobseekers and love seekers to receive wire transfers and send them to other recipients. USA is the most affected by money mule scams.

How Do Money Mule Scams Work?

They are hatched through relationships from social media sites like Instagram and Snapchat which are notorious for this. The scammer builds a friend relationship or a romantic one for this purpose.

Once there is some communication going and trust has been built, they ask you to “help” send some money to a third party from your account. Usually, they will offer you some money to do this. The deposit they make to your account always comes through wire transfers from MoneyGram or Western Union.

Some scammers send physical cheques through the post and ask you to deposit it in your account. Then, a specified amount needs to be transferred and you get to keep the rest. Since it seems like a kind gesture, most people never suspect anything.

The shock comes when the cheque is flagged as fraudulent later by the bank and it can’t clear. Then you are left looking like a cheque fraudster and held liable by your bank for the money transferred.

If there are connections to cybercrime and drug trafficking then the authorities may bring charges against you even if you acted ignorantly. The law is unforgiving. Best to never get involved in these money mule scams from the start. Never transfer money for anyone you have met online, or haven’t spoken to in person, or at least had a video call to see them and verify face to face.

How are Money Mules Recruited?

Dating and romance sites provide the most fertile ground for money mule scam recruits. This is because people involved in a romantic relationships are the least likely to suspect they are being used as channels for money laundering. They will consider it helping their potential partner and follow their instructions. Here are some more romance scams.

Work-from-home job ads can provide desperate jobseekers with quick cash they didn’t work for. As such, they will follow instructions to get paid without much questioning. If an employer asks them to open a new account under their name to receive money, they will do it. Yet this is exactly how money mule scams work. “Dirty” money is split and sent to multiple accounts in small amounts.

Students looking for part time work are another target group. It works to the scammers advantage that college students are naïve and unlikely to notice they are being used. Plus, they are always in need of money. In all these cases, the mode of operation follows one pattern:

• Receive wired money into your account,
• Keep a small fraction,
• Send the rest to a given recipient account.

Signs of Money Mule Scams

• Jobs that require very little work but pay exceedingly well. Easy money and little or no effort. Payment comes in excess and the employee is asked to transfer an amount.
• Employers who request you to open an account to receive funds via wire transfers from Money Gram, Western Union, or ACH, then transfer to a specified recipient. You will have simply created another channel for directing dirty money back to crime rings.
• Online Job ads with sketchy details about your roles and responsibilities can be ways of recruiting money mules. Read more about this in our article This Fake Job Offer Might Land You in Jail.

If you notice such signs, then:

• Stop all communication with the scammers and DO NOT follow any further instructions.
• Cease all money transfers immediately and any other transfers of valuable items.
• Document and save all communication and transaction details. These could help vindicate you as an ignorant participant when the authorities are investigating.
• Report to your bank and give then all the transaction details.
• Report to the FTC (USA) or Action Fraud (UK).
• Report to local law enforcement.