In an ideal world, there would be nothing wrong with a stranger sending you money without your permission, but in the real world, this money comes at a cost. Typically, fraudsters send money to innocent people in order to turn them into accomplices in their crimes.
A “money mule” is someone who transfers money through their personal bank account on behalf of another person. The scam is a method of electronically laundering money obtained through online scams and fraud, as well as crimes such as human and drug trafficking. The money mule scam makes it difficult for law enforcement to track down illegal funds obtained through internet scams and fraud.
Some money mules are aware that they are assisting criminal enterprises, but many are unaware that they are being used as a mule, assisting criminals in profiting by stealing money from unsuspecting victims. These individuals are typically duped and unaware of the criminal intent behind their actions.
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How “Money Mule” scam works
Online job boards, dating sites, social networking sites, online classifieds, and even Darkweb Forums are used to target and recruit money mules, as reported by Chargebackway experts. The criminal recruiter gains the victim’s trust and then entices them by offering a job or establishing a phoney relationship. They then persuade the victim to open a new bank account or use their existing personal account to receive funds sent to them by the criminal.
The criminal then transfers funds to the account or sends a check to be deposited. Many mules are promised payment in exchange for their participation, which may include a cut or commission from the money transfer. Criminal provides specific instructions on how and where to transfer funds from the account. Scammer may request that the funds be withdrawn in cash, transferred to a third party, used to purchase a gift card, or converted to a virtual currency such as Bitcoin. The criminal avoids raising any red flags in the banking system by using the mule’s information. They are laundering illegally obtained money and removing traces of its criminal history by routing it through the mule’s personal account.
In addition to the illegal money laundering aspect of this transaction, the check or funds deposited into the account are frequently fraudulent, and verifying the validity of the check can take weeks. According to Chargebackway, criminals take advantage of the fact that banks are required to make funds from a check deposit available to the account holder within two days of the deposit. They persuade the victim to withdraw or transfer money within a specific time frame before the bank suspects the check is fraudulent.
When the bank realizes the check was written on a non-existent account, the victim is out whatever was sent to the scammer, as well as any other funds from the fraudulent check that the victim may have withdrawn or used. Banks do not bear these losses.
Because they provide a high level of anonymity to their criminal recruiters, who can quickly cut ties with the mule to avoid prosecution, using money mules is a low risk and convenient way for criminals to move illegally obtained funds.
They persuade the victim to withdraw or transfer money within a specific time frame before the bank suspects the check is fraudulent. When the bank realizes the check was written on a non-existent account, the victim is out whatever was sent to the scammer, as well as any other funds from the fraudulent check that the victim may have withdrawn or used. Banks do not bear these losses. Because they provide a high level of anonymity to their criminal recruiters, who can quickly cut ties with the mule to avoid prosecution, using money mules is a low risk and convenient way for criminals to move illegally obtained funds.
Even those who are unaware that they are being used as a money mule may face legal consequences for assisting a criminal in moving stolen funds. Being a money mule is a crime, as is money laundering. If you believe you have been approached to become a money mule, or if you believe you have unknowingly become one, report your suspicions to local law enforcement.
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Warning Signs:
- Unsolicited emails or social media contacts promising “easy” money.
- Communications with a potential “employer” via a web-based internet service, such as Gmail, Yahoo, Hotmail, or “throw away” email services.
- Requests for the opening of a personal bank account in order to receive and transfer funds.
- Offers to keep a portion of the transferred funds.
- Work-from-home job opportunities that are only for moving money.
- An online contact requests that you accept and forward funds to unknown individuals.
Never agree to:
- A work-from-home opportunity that requires you to transfer money.
- Open a bank account or transfer funds at the request of another person.
- Allow someone to use your bank account or debit card.
- Allow money to be deposited into your account from people you don’t know.
- Accept a job offer that involves sending or receiving money or packages and promises easy money.
- Accept someone’s request to receive or forward packages, or to purchase gift cards or virtual currency.
If you suspect you are involved in a money transfer scam, stop transferring money immediately, notify your financial institution, and notify it to local law enforcement. If money has been wired or a gift card was used, notify the wire transfer service company or the gift card servicer and try to cancel the transaction. Finally, notify the Chargebackway experts of any suspicious activity or communications.