Skip to main content
_FB_2018-Icons-finalized-cleaned-up_new_FB_2018-Icons-finalized-cleaned-up_newGroup 9
Find Your Local Branch
Back
Scroll to top

Money Mule Scams: How Criminals Convert Fraud into Profit

Personal Finances 5 min read

Money mule scams are on the rise. Many accomplices are unknowingly involved in their operations. It’s essential for individuals to recognize the signs to avoid becoming entangled in this criminal activity.

Have a question about fraud protection?

Find a Banker Fraud Resources

What is a Money Mule?

Money mules are individuals who unknowingly or knowingly assist criminals in laundering money, often by transferring illegally sourced funds between accounts or across borders. The source of the money comes from fraudulent scams or other illegal activities like drug trafficking. Criminals use their mule’s identity and layer the illegal transactions in an attempt to hide the illegal funds from law enforcement. Once properly hidden, the criminals are able to access their funds and cash out on their illegal activity.

Common Money Mule Scams

There are a number of ways that criminals will try to hide their money from law enforcement. Money mules are a form of money laundering, where criminals attempt to make their illegally sourced funds seem legitimate. Here are a few common ways people can unknowingly fall victim to money mule scams.

1- Deceptive Job Offers

Money mule scammers will act as employers offering high-paying, remote positions. Common job titles could be payment processor, financial coordinator, or international fund liaison. While these job opportunities seem legitimate, their primary function is to receive and transfer illegal funds. The criminal will wire a large sum of funds to the mule, then instruct them to keep a percentage and transfer the remainder of the money to a different account or purchase a certain amount of cryptocurrency. The criminal hides behind their mule’s identity and is able to more easily access their funds.

2 – Romance Scams

This type of mule scam exploits a victim’s emotions and trust. Scammers will find their victims on social media sites, dating sites or other online chat channels. They will deceive their victims with made up personas often using stolen photos and fake details. Over time, the scammer will attempt to build an emotional connection by sending affectionate messages or personal stories. Once they feel they have earned the victim’s trust, they will fabricate a story requiring financial assistance. These are oftentimes medical emergencies or travel issues that need quick funding into an account. Once the scammer has convinced their victim to oblige, they will continue to exploit their trust to launder their illegal funds.

3 – Lottery, Prize, and Investment Scams

If something seems too good to be true – it probably is. These scams typically start via an unsolicited message or phone call informing you that you’ve won a prize. They instruct their victims to take a number of steps before they can claim their prize, and that is where the danger lies. These steps could include gathering your personal details, wiring a “prize tax” or fraudulent fee, accepting a large sum of money, and/or transferring a portion of the winning funds to another account. Similarly, investment scammers typically promise their mule victims “return” for their illegal money transfers – sometimes in the form of cryptocurrency or percentages of the money they wire.

What are the Consequences?

Large overdraft balances are most often the first consequence to the money mule. Once the criminal has access to their mule’s account, they typically push a large lump sum out of the account. This amount oftentimes will exceed the typical balance in the mule’s account, leaving them with a substantial negative balance to dig out from.

Acting as a money mule is illegal, whether the crime is knowing or unknowingly committed. The punishment for these crimes include imprisonment and federal charges. Additionally, your identity and personal information could be stolen from the criminals involved in the money mule scheme.

Internet Crime Complaint Center (IC3): The IC3 is run by the FBI and accepts online internet crime complaints from the victim at www.ic3.gov

How to Protect Yourself

  • As with most methods of protecting yourself against fraud – remain cautious whenever someone requests your personal information or banking information. Only share those details with people or organizations that you trust.
  • If you receive a job offer from an online business, do your due diligence to confirm they are a legitimate company. Additionally, a legitimate employer will not ask you to form a company or open a new bank account on their behalf.
  • Always be cautious if anyone asks you to wire or transfer money on their behalf.
  • Be weary if something seems too good to be true, like you’ve won an unsolicited prize or been chosen to participate in a giveaway.
  • Scammers act on urgency. If someone is pressuring you to do something that you’re uncomfortable with, walk away.

If you or someone you know is afraid they are involved in a money mule scheme, it’s not too late to stop. 

  • Stop communicating with the person giving the directions.
  • Tell your financial institution and consider changing accounts.
  • Report suspicious communications or activity to law enforcement. The Internet Crime Complaint Center (IC3) is the Nation’s central hub for reporting cyber crime and run by the FBI.  Visit www.ic3.gov for resources and more information about how to file a report.
  • Maintain receipts, contact information and communications (emails, text messages, voicemails) so that information can be passed to law enforcement, if needed.

 

Have a question about fraud protection?

Find a Banker Fraud Resources
Share:
First Bank’s Good To Know Logo
Sign up for our newsletter and be the first to know about new tips, insights, and products from First Bank.
First Bank may use this email address to contact you about products, services, and promotions.

You may be interested in...

Image for tile. Learn How Much You Should Be Saving Each Year Wondering how much you should be saving each year? Many specialists believe in the 50/20/30 budget: 50% is spent on necessary expenses (e.g. credit card bills, rent), 20% of your income is put into savings, and 30% is left for your luxury expenses (e.g. a new TV, restaurants). By following this rule, you can comfortably begin saving for retirement or an emergency fund while having enough to make ends meet. How Much Should I Be Saving? While there’s no one-size-fits-all answer to how much you should have saved, there are some goals you should focus on during your 20s, 30s, 40s and beyond. Here’s a recommended savings road map to guide you at any age: 20s: Focus on building your credit, paying off loans and save something each month. Even if you’re not able to save quite up to 20% of your income, try starting at 10%. 30s: Allocate more money into savings, especially if you’re thinking about starting a family, buying a new home, or taking on a few home repairs soon. You should be putting at least 15% of your income into savings, if not more. Additionally, you should continue to pay off all non-mortgage debt. 40s: Get your credit card debt under control and up the amount you’re putting away into savings again. By this time, you should aim to have more than your current salary put away in savings. 50s: Max out your retirement contributions and pay off your mortgage. You should aim to have as much of your income and investments working towards your retirement goals as possible. Ideally, you have more than two times your current salary set aside in savings. Start Saving for Your Future Today Changing the way you spend can feel overwhelming at first and requires discipline. However, in time, you’ll get used to what is necessary and how much of your luxury expenses can be cut or limited. Take charge of your finances and invest in your future. For more questions about how much you should be saving each year, or how to get started, contact your local First Bank branch today!  ——— Sources: Experian: https://www.experian.com/blogs/ask-experian/how-much-should-you-save-each-month/ Huffington Post: http://www.huffingtonpost.com/simple-thrifty-living/in-your-20s-40s-60s-the-b_b_5686551.html Money Under 30: http://www.moneyunder30.com/how-much-do-you-need-to-have-saved-for-retirement 2 min read
Finance 101: Banking Basics Finance 101: Investing in your financial future is one of the smartest things you can do. But there is more to building healthy finances than simply stashing away extra cash in your piggy bank. In this article, we cover a wide range of topics to help you learn the basics of finance and help you make educated decisions regarding your financial future. Checking Accounts For those new to finance, opening a checking account is a great first step. A checking account enables you to deposit money into an account that can be accessed by writing a check, using your debit card, or withdrawing money from your bank’s automated teller machine (ATM). The biggest advantage to having a checking account is that it keeps your money safe while allowing you to access it when needed. Unlike cash, if your debit card becomes lost or stolen your bank can put a stop on your account, prohibiting unauthorized users to access your money. Tips for using a checking account: Keep a running balance of your account to avoid overdrawing your account. Most banks charge an overdraft fee for purchases that are made with insufficient funds. Consider overdraft protection if your bank offers it to you. Familiarize yourself with your account’s minimum balance requirements. Savings Accounts A savings account is less accessible than a checking account, as the Federal Reserve limits the number of free transfers or withdrawals you can make from a savings account. According to Investopedia, “A regular savings account is easy to set up and maintain. You can usually link this type of savings account directly to your checking account at the same bank and quickly and easily move money between the two accounts. Having these two accounts linked can sometimes help you avoid overdraft charges and/or under-the-minimum-balance fees from your checking account.” Having a savings account can help you set aside money for emergencies and help you save for large purchases, all while earning interest. Credit Building and maintaining good credit will provide several advantages to you, including: Lower financing rates More negotiating power Attractive mortgage and refinancing rates Higher credit card limits and rewards While getting a credit card is a great first step to building your credit, maxing out your credit card, failing to pay your credit card bill 4 min read
HSA Rules and Regulations You Should Know If you have a high-deductible health insurance plan, a Health Savings Account (HSA) can help you save for future medical expenses. Health Savings Accounts were established by the federal government as part of the Medicare Prescription Drug, Improvement, and Modernization Act. Like any federal program, HSAs have rules you must follow in order to qualify, make contributions to your account, and withdraw your funds. HSA Rules and Regulations Rules for Qualifying According to federal guidelines, in order to qualify for an HSA, you: Must be covered under a high deductible health plan (HDHP) on the first day of the month Have no other health coverage (some exceptions apply) Are not enrolled in Medicare Cannot be claimed as a dependent on someone else’s prior year tax return Rules for Making Contributions Each year the IRS determines the amount that you, your employer, or anyone else can contribute to your HSA. Determine current contribution limits on the IRS website. Rules for Using Your Savings You can use the money in your HSA account for qualified medical expenses determined by the IRS. Typically, HSAs are used for treatments, prevention and diagnosis of conditions and diseases. HSAs at First Bank* A First Bank Health Savings Account provides you a tax-free distribution from your account any time you need to pay for medical expenses.** First Bank HSAs also come with online banking and bill pay to help you manage your account, and you can access your funds from anywhere with our HSA-specific debit card and checks. Other benefits include: Tax deduction for contributions even if deductions are not itemized Contributions made by employer may be excluded from gross income Contributions accumulate until used Tax free earnings HSA may be transferred or rolled over to another HSA Complete IRS reporting available FDIC insured To learn more about HSA rules and sign up for an account today, visit a First Bank branch near you. *Member FDIC. **Qualified medical expenses, as explained in IRS Pub. 502, include amounts paid for doctors’ fees, prescription medicines, and necessary hospital services not paid for by insurance. Qualified medical expenses may be incurred by you, your spouse, or your dependents. To be eligible for a HSA account, you must you must be 3 min read
High Yield Savings Accounts in South Carolina It’s no secret that travel can make you happier, but did you know that it can also improve your social skills, help you accomplish goals, make you more patient, and improve the quality of your relationships? If you want to travel but aren’t sure how you’re going to pay for it, consider a high-yield savings account with First Bank in South Carolina. A high-yield savings account can help you save up money for a weekend getaway, and earn interest while doing it. Save for a Vacation with our High-Yield Savings Account Do you want to go on a vacation, but aren’t sure where you would go? Here are five popular cities to travel to: New York – What would a trip to New York be without seeing the Statue of Liberty, making your way to the top of the Empire State Building, walking through Central Park, or visiting Times Square? Philly – Don’t miss your chance to visit art museums, historical monuments, and places like the Liberty Bell, the Franklin Institute, the Eastern State Penitentiary, and the Reading Terminal Market. Washington, DC – Take a weekend to travel to our nation’s capital and learn more about U.S. history at the Smithsonian, the Washington Monument, the Lincoln Memorial, and the Museum of Natural History. Chicago – Visit Willis Tower, catch a game at Wrigley Field, or take classic picture by The Bean (Cloud Gate) in Millennium Park. Dallas – If you end up visiting Texas, make sure you spend a day at the Houston Space center and Houston Museum of Natural Science. Don’t forget to spend some time eating great Texan cuisine, like the famous barbecue. Visit First Bank Today A First Bank high-yield savings account can help you save money to get to any of these destinations. Stop by your local South Carolina branch to open an account today. ———- Sources: Travel Triangle: https://traveltriangle.com/blog/traveling-makes-you-happy/ 2 min read