On Tuesday, we talked about what money laundering is and how it affects you. Today, we’ll talk about “money mules,” the part they play in the money laundering process, and how to avoid being tricked into becoming one yourself. Let’s get started!
What is a Money Mule?
A money mule is someone who transfers and moves dirty money for someone else. As a reminder, “dirty” money is money that has been acquired illegally while “clean” money has been earned legally.
Here's a basic example of how money mules help criminals launder money:1. First, a criminal group acquires dirty money. They want to create “layers” between themselves and the funds. This can make it harder to track down where the money came from if the criminal’s bank account is ever investigated by their financial institution or law enforcement.
2. To create a “layer,” the criminals transfer some of the dirty money from one of their accounts to another person (we’ll call him John Doe). The criminals make it look like the funds transfer is for something legitimate, such as a direct deposit from an employer.
3. John Doe then transfers the money from his bank account into another account which is controlled by the criminals. Since John Doe has just moved dirty money on behalf of the criminals, he has become a money mule. John Doe can make it look like the money he sent the criminals was for a legitimate purpose, such as rent.
Types of Money Mules
Some money mules are aware they are transferring dirty money for criminals. They may have been offered a cut of the money in exchange for moving the funds or—in extreme situations—threated by the criminals to do as they say. In other cases, one of the criminals themselves may act as the money mule within their own group.
Not all money mules are aware they are assisting criminals. They may have been scammed into helping.
There are different ways you can be tricked into transferring dirty money for someone else. Romance scams are one such method. In an online romance scam, a criminal uses a dating website/app or social media to establish a close connection with you. Once they have convinced you that they are in love, they exploit that trust and begin asking you to do favors for them, such as receiving money and forwarding the funds to someone else.
Another common method is for criminals to send you unsolicited job offers promising easy money with little to no effort on your part. This can include secret shopper opportunities or jobs that let you work from home. You may be asked to open a new bank account so you can receive and transfer funds on behalf of your new “employer.” They may ask you to open the new account under either your name or the name of the fake business.
How to Protect Yourself
If you are ever transferring money on behalf of someone else, there's a chance you could be a money mule. Acting as a money mule can lead to your bank account being closed, your personal information being exposed, damage to your credit and finances, and—in some cases—legal consequences. Here are some ways you can prevent yourself from becoming an unsuspecting money mule:
- Be suspicious of unsolicited job offers that you receive by mail, email, or social media. A legitimate employer will not ask you to open a new bank account or use your own account to carry out transfers for them.
- If you are interested in following through with an unsolicited job offer, do some research first. At very least, check online to see if the company reaching out to you is legitimate and trustworthy.
- While anyone can be targeted as a potential money mule, be especially careful if you are using dating websites, looking for a job, or if you’re a student. These groups are especially at risk.
- Be cautious when meeting people on social media or dating websites/apps. If someone asks you to use your bank account to receive or forward money for them, that is a red flag.
- Never give your banking information to someone you don’t trust or know well. This includes your account number and login information for online banking.
- If you ever suspect you are being used as a money mule, follow these three initial steps:
(1) Cease communicating with the suspected criminal(s). Don’t do any further transfers for them.
(2) Reach out to your financial institution so they can protect your bank account.
(3) Contact law enforcement for assistance and further instructions. You can even click HERE to find the contact information for the FBI field office over your area.