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New Ways to Scam People: Are You a Money Mule?

Imagine if you were job seeking online and connected with someone you thought was a recruiter for a legitimate job. This person might establish a relationship with you, interview you over the phone, and hire you for this sweet part-time gig working from home. All you have to do is provide your bank account information and allow money transfers to your account, then move the money to another party. Plus, a percentage for you! Easy money, right? Not so fast…you may have just been set up by the recruiter to be a “money mule.”

A money mule is a person who transfers money acquired illegally in person, through a courier service, or electronically, on behalf of others. Typically, the mule is paid for services with part of the money transferred. Although the money mule is typically paid, sometime he or she will assist simply because they have a trusting or romantic relationship with the individual asking for help. Money mule schemes are largely internet-enabled crimes.

Is it illegal? You bet. You may be aiding criminals by acting as a “money mule” to launder money from crimes like drug or human trafficking and other illegal activities. Your witting or unwitting participation could land you in prison and permanently damage your financial standing.

Types of scams
According to the FBI, more than 18,000 complaints were filed in 2018 by people claiming they were victims of fraud with more than $362 million in losses. This was a huge increase of 70% over 2017 figures, which means that these illegal schemes unfortunately work. Typical targets of these schemes are the elderly, women and those who have lost a spouse. The types of money mule schemes are many and varied, but some of the most frequently used include:

  1. Romance Scams—The scammer establishes their victim’s trust by claiming to be a U.S. citizen living abroad, and then tries to convince the victim to send money for airfare or that they’re in trouble and need money. The money is often sent because the victim believes he/she is in a romantic relationship. Or, the victim meets the scammer on a dating site and convinces the victim to open an account on their behalf. This account will be used for criminal activities or money laundering.
  2. Work at Home Scams—Online job posting websites are used by criminals to find individuals seeking flexible work hours and work from home jobs. They are asked to set up an account and deposit/launder money—what could be easier?
  3. Mystery Shopping Job Scams—The employee is hired to assess the performance of money service businesses—i.e. salons, repair shops, banks, accounting firms, and law firms—by completing Electronic Funds Transfers (EFTs) and then evaluating the service using bogus customer satisfaction forms.
  4. Social Networking Scams—Facebook and Twitter are sometimes used to recruit individuals to act as money mules by inventing imaginative stories to befriend and persuade individuals to receive and forward stolen funds.
  5. Credit Scams—Young people and those who have fallen on hard times are especially vulnerable to credit scams. They may apply for loans over the phone or online with unfamiliar lenders who then get their account numbers to deposit stolen funds to. The account holder believes that they’ve received the loan they applied for, withdraw the funds, and many times send some of the funds back to the “lender” to show good faith in repaying the loan. They are then left holding the bag when the credit is returned.

The warning signs
You receive an unsolicited email or contact over social media promising easy money for not a lot of work.

  • The employer uses web-based email, such as Gmail, Yahoo or Hotmail.
  • You are asked to open up a bank account in your name or in the name of the new company.
  • You are asked to receive funds and then process or transfer funds via wire transfer, ACH, mail or money order.
  • You are instructed to keep a portion of the money you transfer.

Pretty shady stuff, but if you just follow along step by step, it’s easy to see how someone could get sucked into such a scheme—especially if your emotions are involved, like with children, the poor or the elderly.

Be suspicious
According to the Federal Deposit Insurance Corporation, most of the money transfers start with a request for an electronic funds transfer (EFT) into a deposit account, followed by withdrawing the funds or forwarding them to another party via EFT. It’s usually a large deposit followed by an outbound wire transfer—minus 10% for the laundering fee.

How to protect yourself
Some good rules of thumb:

  • Don’t use your bank account to transfer money to anyone. Don’t accept any job offers that ask you to do this.
  • Never give your financial details to someone you don’t know and trust, especially if you meet them online.
  • Be suspicious of individuals you meet on dating websites if they want to use your bank account for receiving and forwarding money.
  • Search online for information about any one that is soliciting you.

How to report suspicious activity
If you believe you are part of a money mule scam, stop transferring money and immediately notify your financial institution and law enforcement. Your financial institution should stop all possible transactions.

Contact the FBI’s Internet Crime Complaint Center and your local FBI Field Office. Find your local field office here.

Resources: Bankinfosecurity.com; FBI.gov; Federal Deposit Insurance Corporation, National Association of Federally-Insured Credit Unions