Money Mule Scams: How Criminals Convert Fraud into Profit

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.