Some time ago, a company called BioCatch, which helps protect against fraud, estimated that there are about two million fake bank accounts, called mule accounts, in the U.S. These accounts help move around $3 billion in stolen money every year.
The company also found that scammers are now sending smaller amounts of money, about $1,500 on average, to these fake accounts. They do this to avoid getting caught. Additionally, scammers are using new tools called hybrid bots to open many of these fake accounts quickly.
What is a money mule?
A money mule is someone who moves stolen money for criminals. The term “mule” comes from the idea of carrying something from one place to another. These mules usually get money and then send it to another bank account, or they let scammers use their bank accounts.
Just letting your parents use your bank account to move money isn’t the same as money laundering. Money laundering involves moving money to hide where it originally came from.
There are different kinds of money mules. The consequences they face depend on whether they knew they were part of a crime:
1. Unwitting money mule
An unwitting money mule is someone who doesn’t know they are involved in a crime. They are often tricked online by fake job offers that seem real. These jobs pay a lot of money for easy tasks, like opening bank accounts in their own names for a “company.”
They can also be tricked through online dating scams. Many victims are students, job seekers, people who are having money troubles, or users of dating apps. A report from Barclays mentioned that the number of young people under 21 used as money mules has more than tripled in recent years.
2. Witting money mule
A witting money mule is someone who knows they are part of a money-laundering scheme but chooses to ignore the warnings. At first, they might not know what they are involved in, but over time they realize it. Even if their banks warn them or something seems wrong, they keep going. They might even try to act less suspicious to avoid getting caught.
3. Complicity money mule
A complicit money mule knows they are helping with money laundering and chooses to do it anyway. Some of these people even advertise their services and help recruit others to join them.
How are money mules recruited?
There are four main ways people are tricked into becoming unwitting money mules:
- Remote Work: Some job offers promise a lot of money for very little work. These offers are usually not from real companies.
- Gamers: Scammers ask gamers to change their dirty money into in-game currency. They use this money to buy weapons or power up their game characters, planning to sell these powered-up characters for real money on sites like eBay.
- Dating Apps: Scammers use dating apps to make fake relationships that can last for months or even years. Once they have gained trust, they start asking for money favors. Remember, never send or receive money from someone you’ve only met online, especially if you’ve never seen them in person.
- Sweepstakes “Winners”: Sometimes, you might be told you’ve won a contest or sweepstakes that you never entered, or you win immediately after entering. They tell you to deposit the money into your bank, keep some, and send the rest back. This type of scam is known as a “prize scam.“
Recognize the red flags of money laundering scams
Be careful if a job uses free email services like Gmail, Yahoo, Hotmail, or Outlook. Most real jobs have their own email addresses, like “@lifehacker.com.” Often, these job ads are found on sites like Craigslist or Facebook, which may not check if the jobs are real.
If a job asks you to open a bank account in your name for any reason, be suspicious. They might say it’s for a real job task, but real businesses don’t need you to do this.
If a job gives you money and tells you to send it somewhere else, this is money laundering. They may use ways like wire transfers, mail, or services like Western Union, MoneyGram, or PayPal. They might even say you can keep some of the money.
If someone you’ve met online but never in person asks you to move or receive money, see it as a warning sign. It might look like a favor or something else creative, but it’s usually a trick.
What are the consequences of being a money mule?
Being a money mule is illegal, and you can get in big trouble for it. You might go to jail for being part of a crime that moves stolen money, even if you didn’t know it was wrong. Depending on what you did as a money mule, you could face serious charges like mail fraud, wire fraud, identity theft, bank fraud, or money laundering.
Also, being a money mule puts you at risk of having your personal information stolen and used for other crimes. It can also ruin your credit, and you might have to pay back any money that victims lost because of the crime.
What to do if you think you’re an unwitting money mule
The FBI has advice on what to do if you think you are being used as a money mule:
- Stop talking to the scammers.
- Stop sending money or anything valuable right away.
- Keep a record of all your conversations with the scammers. This includes emails, texts, chats, and more. Also, keep any physical proof like receipts.
- Tell your bank or any money service you used about what happened.
- Report the problem to the police. You can report suspicious activities to the FBI’s Internet Crime Complaint Center at ic3.gov, and you should also contact your local FBI office.
Remember, if a job, a deal, or someone you meet online seems too good to be true, it probably is.