Money Mule Learning Module

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Financial Crime Learning Module:Money Mules

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Welcome to the Financial Crime Money Mules learning module.

• In this module, you will delve into the complex world of Money Mules, gaining insights into their role in facilitating financial crime and understanding the importance of combating their activities.
• Explore the issue of Money Mules further and gain an understanding of how financial institutions and law enforcement agencies are working together to prevent and detect their involvement.
• Gain awareness of the legal and ethical implications associated with being a Money Mule and learn how to recognize and avoid involvement in such illicit schemes.

Introduction...

Example 3

Example 2

Definition: Individuals unwittingly or knowingly recruited by criminal organisations to transfer illegally obtained funds through their bank accounts.

What is a Money Mule?

Example 1

John, a college student looking for part-time work, responds to an online job advertisement offering quick cash for minimal effort. He is instructed to receive money into his bank account and transfer it to another account, keeping a small percentage as his commission.Unbeknownst to John, the funds he is transferring are proceeds from online scams. Eventually, authorities trace the illegal transactions back to John's account, leading to his arrest for money laundering. John's promising future is shattered as he faces criminal charges and struggles to clear his name.

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John:

example #1

Sarah, a single mother struggling to make ends meet, is approached by a friend who offers her a lucrative opportunity to earn extra income. Sarah is asked to receive funds into her bank account and forward them to an overseas account on behalf of a supposed business associate.Desperate for financial stability, Sarah agrees without questioning the legality of the transactions. However, when law enforcement agencies crack down on the criminal network behind the scheme, Sarah finds herself implicated as a Money Mule. Despite her lack of intent to engage in criminal activity, Sarah faces legal consequences and social stigma, jeopardising her reputation and livelihood.

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Sarah:

example #2

Mark, a recent immigrant seeking employment opportunities, falls victim to a sophisticated phishing scam targeting vulnerable individuals in his community. He receives an email promising a high-paying job with minimal qualifications and is instructed to provide his bank account details for payment processing. Mark, eager to secure stable income, complies with the request and unwittingly becomes a Money Mule for a criminal syndicate. When authorities uncover the illegal activities, Mark is arrested and faces deportation, separating him from his family and jeopardising his immigration status.

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Mark:

example #3

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In the simplest terms a money mule is someone whose bank account is used to launder the proceeds of crime. There are three main types of mules:

• An individual or company's account may unknowingly be used to receive and pass on stolen funds
• An existing customer may be recruited by a money mule gang, and paid a small 'wage' to receive and pass on stolen funds via their account.
• A criminal may open an account using fake documentation for the sole purpose of receiving and passing on stolen funds

so What is a Money Mule?

3. Money Mules and Fake Accounts

2. Money Mule Recruitment

1. Unwitting Victims of Money Mules

Click on the following tabs to understand the different types of threats associated with each mule scenario, how you can spot a mule account, and what advice we should offer our customers who become involved (unknowingly or not) with this type of fraud.

Types of Money Mules

Money mules are significant in the process of cashing out fraudulent funds. A money mule is a person who receives and transfers illegally acquired money on behalf of others. Unwitting mules are likely recruited through online job advertisements, social media posts, and spam email. They also may be recruited through romance scams. Criminals will start relationships with these individuals through online dating sites, social networking sites and/or job advertisement sites. Romance mules usually fall prey to romance scams, which take place online and are deceitful romantic interactions with unsuspecting victims. These criminals work to gain the trust and affection of victims and use that relationship to commit fraud. The majority of the time, the victims do not know they are involved in a fraud scheme or criminal act until it is too late. Criminals create fake profiles with stolen photographs and false names on dating websites, social media sites, blog forums, support groups, etc. Upon finding their next victim, they will begin contacting them and almost immediately want to chat privately via email or chat sessions. Criminals gain their victims trust over a number of weeks and months as they form a relationship with the victim. They act as if they are in love with the victim, forming bonds and sharing life stories. These criminals rarely live close to their victims; typically, they live or work abroad and promise they will visit as soon as they can. Once they gain the victim's trust, they begin asking them to receive and transfer money on their behalf.

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Unwitting Victims of Money Mules

The following are some examples of reasons given by criminals:

• They are experiencing banking-wire issues due to a foreign account
• They need money in the romance mule's home country to pay for a family member's illness or funeral, hospital bills, employees, taxes, etc
• They claim to be military personnel stationed overseas who need assistance accessing their funds due to being in a war zone
• They claim they are inheriting millions and must receive the funds in the romance mule's home country.

Once the victims agree to accept the funds and assist in resending them to others, they have unknowingly become mules. The deposits will most likely be from stolen or counterfeit cheques and transferred funds will be from illicit activities or compromised accounts.

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Unwitting Victims of Money Mules

Criminals recruit mules- generally members of the public without ties to criminality- who have “clean” bank accounts. Money is moved quickly through a series of mule accounts, enabling the money to go back to the criminal having passed through several legitimate accounts. Criminals recruit via social media sites and often reach out to students and young people with offers of 'instant cash' and 'easy money' schemes. In truth, criminals are seeking to launder the proceeds of crime through genuine bank accounts, to 'clean' the cash. Criminals may advertise the opportunity as a job advert, with very little work for a lot of money. However, should a customer get caught up with one of these scams there are very serious consequences such as:

• Obtaining a criminal record
• Losing access to a bank account
• Finding it difficult to get a job in a financial industry
• Being unable to take out a contract for items such as a mobile phone
• Damage to credit and financial standing

The images on the right show examples of mule recruitment advertisements posted on social media.

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Money Mule Recruitment

Example 1:

Example 2:

How can you help our customers to protect themselves from becoming a Money Mule?Tell them to:

• Be wary of individuals who contact them via social media sites, whether known to them or not, with offers of quick cash by accepting funds into their account
• Ignore images on social media of cash and/or cards with 'easy money' adverts attached – whilst appealing, becoming a mule is not a victimless crime and could result in the customers standard of living being ruined for the rest of their lives
• If a job advert sounds too good to be true, it probably is – don't fall for 'get rich, for little work' scams
• Be wary of the spelling and grammar used within the approaches. Job adverts in poor English or containing spelling mistakes should cause concern

Money Mules and Insider Recruitment: Criminals have also been known to approach members of staff on social media to act as mules, or to help with the recruitment of mules.The images on the right show examples of mule recruitment advertisements posted on social media.

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Money Mule Recruitment

Example 1:

Example 2:

A common Money Mule tactic is for criminals to open accounts with the bank using fake documentation with the sole intention of using the account to launder the proceeds of crime. As a bank we have a duty to perform rigorous identity checks at account opening and during the life of an account. As a member of staff, we all have a responsibility to identify unusual activity and report it. How can you help to prevent Money Mule applications and subsequent fraudulent activity occurring against one of our accounts? Firstly, you need to understand the types of fraudulent applications received by the bank. Two common examples have been listed below:

• Business accounts: one recent fraud ring involved over 40 business accounts being opened online with fake UK Driving Licences & Table B documents which circumvented existing fraud controls. Once the business account was opened the criminal changed the name of the business account to that of a company from whom they had stolen or intercepted a cheque from. The stolen cheques were then paid into the business account. Over £600k of fraudulent funds were received into these mule accounts.
• Personal accounts: we saw an organised attack on Student Accounts where a £2k overdraft is offered to customers. Investigations established that online applications were being started in Poland (where there was evidence of homeless vulnerable people being recruited to use their ID documents). The applications were completed in the UK where fake Student Finance England letters were used as the Table B documents. Once the account was opened, the £2k overdraft was immediately withdrawn via ATMs. Over 250 accounts were opened. Evidence was packaged up and passed to Law Enforcement for further action.

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Money Mules and Fake Accounts

What can you do to help prevent a Money Mule account from being opened or used? If you are involved within the account opening process you should follow local procedures with care. The Bank is required to carry out ID and address verification checks to meet our anti-money laundering obligations as well as to protect our customers and the Bank from fraud and bad debt. It is important that you adhere to KYC guidelines at all times:

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Money Mules and Fake Accounts

Consider the following:

• Does the customer live near the branch/business centre. If not, why are they looking to open an account at your branch?
• Does the salary stated by the customer match the job description they have given you?
• Does the business proposition sound realistic? (e.g. setting up a construction company or painting & decorating business but has presented a Provisional Driving Licence as Table A and/or Table B documents)
• Is the projected turnover realistic for the type of business? (e.g. £100,000 turnover for a one man domestic cleaning company).
• Have you seen other applications from the same nationality/similar address using the same/similar types of account opening documents (e.g. all presenting water bills and ID cards)

• Is the ID document genuine? (Is the photograph a true likeness? Does the signature match? Use the strongest identification verification tools available to validate - e.g. IVRS machine, Keesing, MRZ checker)
• Is the address verification document genuine? (Does the utility bill make sense – e.g. is the billing date in line with dates of usage? Is the bill amount overly high or low for the billing period? Does the Bank statement add up – e.g. any suspicious spending? Is the sort code genuine? Does the balance tally with the transaction spend?)
• Is the name of the account being opened one that is similar to a business, especially a well known one – e.g. personal account in name of Mr Chester Ceramics (which may get used to accept cheques payable to Chester Ceramics). Business account in name of Marbles and Stones (which may get used to accept cheques payable to M&S) etc.

• If the customer is opening a business account after having had a personal account, does the activity on the personal account look genuine? (Evidence of general living expenditure - e.g. bill payments, fuel costs, insurance).

What about after the account is open? Consider the following:

• Does the activity on an account look unusual? (e.g. lots of round amounts of cash and automated deposits – only to be withdrawn immediately afterwards)
• A large amount of money comes in to the account, or funds come in from overseas or from an unusual source – is this consistent with what we know about the customer?
• No evidence of any genuine business activity – e.g. construction business but no evidence of making purchases from builders merchants.

It is essential that you familiarise yourself with KYC guidelines and that you meet the requirements on every account that you open. Be vigilant – if something appears suspicious or doesn't quite add up, don't be afraid to challenge and ask questions of the customer. Not following up on suspicions can result in significant losses to the Bank and adversely impact our real customers.

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Money Mules and Fake Accounts

Scenario 2

Scenario 1

How do Money Mule scams work in practice?Click below for realistic examples for Money Mule scams

Online Recruitment Scheme Recruitment Process: Criminals post job advertisements or send unsolicited emails offering work-from-home opportunities with high salaries and minimal effort. Potential recruits are enticed by promises of quick and easy money, often without fully understanding the nature of the job. Money Transfer Procedures: Once recruited, individuals are instructed to provide their bank account details to receive funds from fraudulent activities, such as phishing scams or online fraud. They are then directed to transfer the money to other accounts, usually overseas, keeping a portion as their commission. Role of Money Mules: The recruited individuals, known as Money Mules, unwittingly facilitate the movement of illicit funds through their bank accounts, effectively laundering the money for the criminal organization. Tactics Employed by Criminals: Criminals use sophisticated techniques to manipulate and exploit vulnerable individuals, including false promises, emotional manipulation, and coercion. They may also use fake job postings on legitimate employment websites to lend credibility to their schemes. Potential Ramifications: Money Mules face serious legal consequences for their involvement in illicit financial activities, including charges of money laundering, fraud, and conspiracy. They may also suffer financial losses, reputational damage, and difficulties obtaining future employment or financial services.

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Example Money Mule Scenario 1:

"Sweetheart" Scam Recruitment Process: Criminals target individuals on dating websites or social media platforms, posing as romantic partners seeking genuine relationships. They establish trust and emotional connections with their victims over time, grooming them for financial exploitation. Money Transfer Procedures: After gaining the victim's trust, the criminal fabricates a story about financial hardship or emergency situations, persuading the victim to send money or receive funds into their bank account on their behalf. The victim is instructed to transfer the money to other accounts, believing they are helping their romantic partner in need. Role of Money Mules: Unbeknownst to the victim, they are being used as Money Mules to facilitate the movement of illegally obtained funds through their bank accounts. The criminals exploit their emotional vulnerability to manipulate them into participating in the scheme. Tactics Employed by Criminals: Criminals employ psychological manipulation tactics, including love bombing, gaslighting, and isolation, to gain control over their victims and coerce them into compliance. They exploit the victim's emotions and desire for companionship to extract money and involve them in criminal activities. Potential Ramifications: Victims of romance scams not only suffer financial losses but also endure emotional trauma, feelings of betrayal, and shattered trust. Additionally, if discovered by law enforcement, victims may face legal repercussions for their unwitting involvement in Money Mule activities, further exacerbating their distress and hardship.

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Example Money Mule Scenario 2:

First hand accounts from victims of Money Mule Scams: The above video shows how Nearly 6,000 students were victims of Money Muling in 2018. Involvement in this type of financial fraud guarantees a criminal record and has seen students unable to open a bank account, get a mobile phone contract or even end up with a 14-year prison sentence.

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Test your knowledge:Money Mule Quiz

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