HOW ARE MONEY MULES RECRUITED?

Bachir El Nakib,

Money mules serve as the “placement” and/or “layering” aspects of the Money Laundering Cycle and allow “true” criminals to distance themselves from the victim (source of funds).

Money mules often do not realize they could be moving money tied to human trafficking or other crimes.

• Placement: the movement of funds to a money mule, often by wire transfer deposit into the money mule’s bank account. In this phase, a victim or a criminal provides money to the money mule to move, based on the criminal’s instruction. Some money mules never touch a computer.
• Layering: Money is moved from the initial money mule account to other money mule accounts or other criminals involved in the scheme. In this phase, funds are moved among money mules and criminals and possibly split into multiple transactions or converted into additional forms of value. These might include: wire transfers, cashier’s checks, virtual currency, or physical cash.
• Integration: the movement of laundered money back into the financial system.

More than 90% of money mule transactions are linked to cybercrime. The illegally obtained money often comes from phishing, malware attacks, on-line shopping/e-commerce fraud, payment card fraud (pcf), business e-mail compromise (bec) and on-line fraud, and others.

A money mule is a bit like a drugs mule, someone who is carrying out illicit activities on behalf of others. His definition is that a money or cashout mule is one where an account is “used to receive fraudulent funds form a third party victim. The individual involved may or may not be complicit in the crime: 

• Complicit individuals are fully aware of their involvement in the process, e.g. they open the account with the intention to defraud;

whilst

• Non-complicit individuals are unaware of their involvement, e.g. victims of phishing attacks, account takeover, job advert scams (duped)

A 'money mule', or 'money transfer agent' as it is sometimes called, is someone recruited by fraudsters needing to launder the funds obtained as a result of phishing and Trojan scams. As most fraudsters behind these scams are located overseas and it is not possible to make cross-border transfers from most online bank accounts in the UK, a 'money mule' is required to launder the money. After being recruited by the fraudsters, money mules receive funds into their accounts and they then withdraw the money and send it overseas using a wire transfer service, minus a certain commission payment.

Money muling

A money mule is a person who transfers stolen money between different countries.

Money mules are people who, often without knowing it, have been recruited as money laundering intermediaries for criminals and criminal organisations.

The money mules transfer stolen funds between accounts, often in different countries, on behalf of others. After receiving stolen money into their account, they are asked to withdraw it and wire the money to a different account, which is often one overseas. Mules sometimes keep some of the money for themselves as commission. Even if money mules are unaware that the money they’re transferring was stolen, they have played a crucial role in fraud and money laundering. As such, they can be prosecuted and could face prison, a fine or community service.

Criminals will often use fake job adverts, or create social media posts about opportunities to make money quickly, in order to recruit potential money mules.

Money mules are recruited, sometimes unwittingly, by criminals to transfer illegally obtained money between different bank accounts. Money mules receive the stolen funds into their account, they are then asked to withdraw it and wire the money to a different account, often one overseas, keeping some of the money for themselves.

Even if you’re unaware that the money you’re transferring was illegally obtained, you have played an important role in fraud and money laundering, and can still be prosecuted. Criminals will often use fake job adverts, or create social media posts about opportunities to make money quickly, in order to lure potential money mule recruits.

A 2016 investigation supported by Europol, Eurojust and others found that more than 90 % of money-mule transactions are linked to cybercrime. The illegally obtained money often comes from phishing, malware attacks, online shopping/e-commerce fraud, payment card fraud, and sophisticated online fraud.

As a result of that investigation, law enforcement agencies and judicial authorities from Belgium, Denmark, Greece, the Netherlands, Romania, Spain, Portugal and the United Kingdom joined forces in the first coordinated European action against money muling.

Over the course of a week, Europol’s European Cybercrime Centre (EC3) and the Joint Cybercrime Action Taskforce (J-CAT), together with Eurojust and the European Banking Federation (EBF), provided operational and analytical support to the authorities involved.

The operation led to the identification of nearly 700 money mules across Europe. Police interviewed 198 suspects and made 81 arrests.

With the support of over 70 banks, the authorities were able to identify over 900 victims of these money mules or the criminals they work with.

The operation was part of the European Money Mule Action (EMMA), a pilot project conducted as part of the EMPACT Cybercrime Payment Fraud Operational Action Plan that targets combat online and payment card fraud.

EMMA, modelled on a project that has been successfully deployed in recent years in the Netherlands, builds on effective partnerships among the police, prosecutors and the banking sector at the national and international levels.

Europol has published a poster and a flyer, available in six languages, with tips on how to avoid becoming a money mule.

Behaviours that put you at risk of becoming a money mule

• Responding to job adverts, or social media posts that promise large amounts of money for very little work. 
• Failing to research a potential employer, particularly one based overseas, before handing over your personal or financial details to them.
• Allowing an employer, or someone you don’t know and trust, to use your bank account to transfer money.

How to protect yourself

• No legitimate company will ever ask you to use your own bank account to transfer their money. Don’t accept any job offers that ask you to do this. 
• Be especially wary of job offers from people or companies overseas as it will be harder for you to find out if they really are legitimate.
• Never give your financial details to someone you don’t know and trust.

In 2010, The FBI Cyber Crimes Task Force, composed of Federal, State, and Local law enforcement, charged more than 37 defendants involved in a highly organized money mule scheme, facilitated by the Zeus Financial Trojan. This group of money mules opened several bank accounts, using both real and fake identification, to receive stolen funds from compromised bank accounts, withdraw the stolen money, then wire the stolen funds overseas. These money mules facilitated the theft of over $3 million from victim bank accounts

Note the ages of these folks. Average age? 

That’s the typical person involved in the process. The crime falls into those who are committing first party fraud and beneficiary fraud.

The fraudsters’ modus operandi for first party fraud is to open an account with a view to secure an advance loan or overdraft, or commit a scam such as authorised loan abuse with no intention of repaying the debt.

The accounts opened often involve the impersonation of a real person, the creation of a completely false ID, utilisation of someone else’s account with or without their permission or using a legitimate ID. 

Meanwhile, the typical profile of a first party fraudster mule is:

• Male aged 26-32
• Less than 36 months since account opened with the bank
• No salary mandate linked to the account
• Usually living in London, Manchester, Birmingham

Beneficiary fraud differs in that the accounts are used to process the proceeds of a fraud or scam against other financial institutions. Beneficiary accounts are opened with the

sole intention of being used fraudulently, although sometimes they are opened with good intention and later sold on to others to use for fraudulent purposes.

The typical profile of a beneficiary fraudster mule is:

• Male aged under 25
• Less than 6 months or more than 36 months since the account was opened with the bank
• More likely to have a salary mandate linked to the account
• Usually living in London, Manchester, Birmingham

According to the bank fraud president:

• 43% of frauds are committed within six months of account opening compared with 20% after over 36 months.
• 28% are committed by under 20 years old 
• 70% are by people who are not UK nationality
• 80% have no regular salary

Many are from large fraud rings with linked beneficiaries across multiple accounts and banks This is why the bank closes around 2,500 accounts or more every year, especially where they can see a link to a confirmed beneficiary account.

A money mule, is sometimes called a 'smurfer,' is a person whoo transfer money acquired illegally (e.g., stolen) in person, through a courier service, or electronically, on behalf of others. Typically, the mule is paid for services with a small part of the money transferred. Money mules are often dupes recruited on-line for what they think is legitimate employment, not aware that the money they are transferring is the product of crime. The money is transferred from the mule's account to the scam operator, typically in another country. Similar techniques are used to transfer illegal merchandise.

Mules recruited online are typically used to transfer the proceeds from online fraud, such as 'phishing' scams scams, malware scams or scams, [beware of email scams] that operate around auction sites like eBay. After money or merchandise has been stolen, the criminal employs a mule to transfer the money or goods, hiding the criminal's true identity and location from the victim of the crime and the authorities. By using instant payment mechanisms such as MSB [Western Union of Money Gram], the mule allows the thief to transform a reversible and traceable transaction into an irreversible and untraceable one.

Money mules are complicit and risk criminal prosecution and long jail sentences. Commonly, they are recruited with job advertisements for 'payment processing agents', 'money transfer agents', 'local processors', and other similar titles; the real benefit to the criminals is not the work carried out by the mule, but that the criminals are distanced from the risky, visible transfer. Some money mules are recruited by an attractive member of the opposite sex. Candidates are asked to accept funds and to forward them, after deducting a relatively small payment for themselves, to a third party, which they can do from home. Legitimate companies use escrow services for this kind of work.[5] Criminals trading in stolen or illegally acquired goods use similar tactics to recruit mules who receive packages and forward them to mail drops not traceable to the criminal.

Bitcoin ATMs were reported by Brian Krebs in 2016 to be rising in popularity for money muling of young people caught acting as 'money mules' has doubled in the past four years, according to the UK's fraud prevention service, Cifas.

Fraudsters may ask you to receive money into your bank account and transfer it into another account, keeping some of the cash for yourself. If you let this happen, you’re a money mule. You’re involved in money laundering, which is a crime.

A mule allows their bank account to be used by others to transfer money in and out of it, and in return, keep some of the money for themselves.

The money to be laundered is likely to have come from drug smuggling, people trafficking and terrorism, experts say.

If caught, money mules have their bank accounts closed and could face jail. Between January and September of this year, there were 8,652 cases involving 18-24-year-olds, Cifas said. It added that young people, including students, are often targeted because they are vulnerable and short of money. Adverts can appear online through a social media post, offering cash rewards for little work.

The job advertised might be a 'financial manager' or 'UK representative', and a UK bank account will be a requirement.

How to avoid becoming a money mule

1. Do not give bank details to anyone you do not know or trust
2. Be wary of job offers where all interactions and transactions are done online
3. Be cautious of unsolicited offers of easy money
4. Research any company that makes you a job offer
5. Be wary of job offers written in poor English with grammatical errors or spelling mistakes

The rise in cases has prompted a new campaign, Don't be fooled:

You might be approached by fraudsters online or in person. They might post what looks like a genuine job ad, then ask for your bank details.

Once you become a money mule, it can be hard to stop. You could be attacked or threatened with violence if you don’t continue to let your account be used by criminals.

Don’t Be Fooled by offers of quick cash.

Criminals need money mules to launder the profits of their crimes. Mules will usually be unaware of where the money comes from – fraud, scams and other serious crime – or where it goes.

Watch this film to see the devastating crimes you enable by acting as a money mule.

It features a film called Sponsor a Child Trafficker, warning would-be mules of the key role they could play 'in the life of a criminal and the innocent people they enslave'.

Money laundering is illegal and can lead to 14 years imprisonment.

Those caught could struggle to obtain student loans, mobile phone contracts or other financial products if their bank account is closed due to money laundering.

'Too good to be true'

Katy Worobec, from UK Finance, said money muling is money laundering.

'We're urging people not to give their bank account details to anyone unless they know and trust them,' she said.

'If an offer of easy money sounds too good to be true, it probably is.'

Simon Dukes, chief executive of Cifas, said he hoped educating young people about how serious this type of fraud is, will make them think twice before getting involved

Europol arrested 1800 money mules as part of an anti-money-laundering operation

Ignorance is not an excuse when it comes to the law and money muling; they are breaking the law by laundering the illicit proceeds of crime. Investigation reveals money mules were laundering profits from online fraud schemes such as business email compromise and Forex scams.

Today saw the conclusion of the anti-money mule operation EMMA 7, an international action coordinated by Europol in cooperation with 27 countries, Eurojust, INTERPOL, the European Banking Federation (EBF) and the FinTech FinCrime Exchange. The operation resulted in 1 803 arrests and the identification of over 18 000 money mules. It also revealed that money mules were being used to launder money for a wide array of online scams such as sim-swapping, man in the middle attacks, e-commerce fraud and phishing.

The authorities conducted 2,503 individual investigations, the operation prevented losses of €67.5 million by stopping 7,000 fraudulent transactions that were reported. According to Europol, around 400 banks and financial institutions supported the operation.

Another important result was the identification of 324 recruiters.

Europol pointed out that money mules can be recruited unknowingly into the criminal operation. Groups of individuals such as students, immigrants, and people in economic distress, are a privileged target of recruiters that offer them easy money. Recruiters leverage multiple channels, such as legitimate-looking job adverts and social media posts.

Over roughly two and a half months of operations, EMMA 7 saw law enforcement, financial institutions and the private sector, including Western Union, Microsoft and Fourthline, cooperate in a concerted effort against money laundering in Europe, Asia, North America, Colombia and Australia. As well as targeting the laundering of profits through money muling networks, investigators also sought intelligence on the sources of these illicit profits, shedding more light on the size and nature of the criminal economies that money mules serve. 

Results from 15 September – 30 November

• 18 351 money mules identified;

• 324 recruiters/herders identified;

• 1 803 arrested individuals;

• 2 503 investigations initiated;

• 7 000 fraudulent transactions reported;

• €67.5 million prevented losses.

The complexity of money muling operations, and law enforcement’s response to them, reflect how muling networks are created. Unlike many financial crimes, money mules can be recruited unknowingly into the criminal operation. The organised crime groups do this by preying on groups such as students, immigrants, and those in economic distress, offering easy money through legitimate-looking job adverts and social media posts.