Money mules – doing the launderers’ donkey work

Money laundering is a huge business. Between 2-5% of global GDP (gross domestic product), or $800 billion – $2 trillion US dollars, is laundered globally in one year.[1] One of the many ways of laundering money is through the use of money mules

How does it work?

Money mules take part in money laundering activities by, often unwittingly, receiving and transferring illegally obtained money between bank accounts and countries.

To recruit money mules, criminals will often promise easy money with little or no effort needed. They will ask someone to agree to share bank details so that cash can be deposited into their account, ready to be forwarded onto another account.

Criminals will target people with no criminal history so that any transactions will seem less suspicious to their bank. The source of the money and it’s intended destination will not be known by the money mule, but it could be used to fund drugs, human trafficking and terrorism.

What is being done?

In Europe, law enforcement authorities have stepped up their efforts to crack down on money mule schemes.

The fifth European Money Mule Action (EMMA 5), which took place between September – November 2019, resulted in the identification of 3,833 money mules alongside 386 money mule recruiters, of which 228 were arrested.

1,025 criminal investigations were open and more than 650 banks, 17 bank associations and other financial institutions helped to report 7,520 fraudulent money mule transactions, preventing a total loss of €12.9 million.[1]

What happens if you’re caught?

Those found to have acted as money mules are likely to get their bank account closed down. They may also find it extremely difficult to open a new account with another bank because their credit profile could well be flagged with a ‘first party fraud’ marker, which informs other banks that their account has been used for fraud.

In the UK, money laundering under the Proceeds of Crime Act can lead to a sentence of up to 14 years in jail and, if a person knowingly conducts money mule activities, they could potentially face this sentence. Even those who act unwittingly are still committing a crime.

How do you avoid becoming involved?

Anyone who suspects they are caught up in money mule activity should stop transferring money immediately, notify their bank or payment provider, and report it to the police. This could prevent other people from becoming money mules and even help catch the criminals.

This article originally appeared in Business and Industry’s Financial Crime campaign.

Article Source: Jason Morris, Content Development Manager, International Compliance Association

[1] https://www.europol.europa.eu/newsroom/news/228-arrests-and-over-3800-money-mules-identified-in-global-action-against-money-laundering