Angèle Schmitz
LinkedIn
7th December 2023

Beware of “money muling”! What are the tactics and how can you stay vigilant?

The recent arrest of 10 offenders on suspicion of being 'money mules' has once again drawn public attention to this money laundering practice. It seems that young people aged between 16 and 30 are increasingly likely to be "hired" as money mules. According to Europol, 90% of the money muling transactions discovered by the European Money Mule Actions are linked to cybercrime (phishing, etc.). Happy Reading!

What is money muling?

Money muling is a type of money laundering that uses a ‘money mule,’ a person who receives funds from a third party deposited into his or her bank account. On receipt, the mule transfers the money or physically hands it over to another person in exchange for a commission.

Even if the money mule is not directly linked to the crime that is the source of the financial flow (cybercrime, payment, online fraud, drugs, human trafficking, etc.), the person becomes an accomplice to the offender because it is they who ‘launder’ the money from the crime. Money smugglers use this method to transfer funds internationally, while helping criminal syndicates to remain anonymous.

Illegal money often comes from a range of criminal activities, including:

  • Phishing,

  • Malware attacks,

  • Online auction fraud,

  • E-commerce fraud,

  • Business email compromise (BEC)

  • CEO fraud,

  • Romance scams,

  • Holiday/booking fraud, etc.

How does money muling work?

Money muling generally involves third parties, known as ‘mules,’ who are used to move money anonymously to conceal the source of funds.

The process can vary, but generally involves:

  • Recruiting mules: criminals target individuals, often young, innocent, and unassuming. This type of recruitment is very often carried out online via fraudulent job advertisements or misleading e-mails.

  • Money transfer: money from illegal activities is transferred to the bank accounts or credit cards of mules who receive instructions.

  • Distribution of funds: depending on the instructions received, the mules transfer the money to other accounts (bank transfers, online payments, or other methods) or take the sums in cash for physical delivery.

  • Money laundering: using mules makes it difficult to trace where the money comes from.

Raising awareness and taking security measures

With all the possibilities available to criminals, the cybercrime threat landscape is rapidly expanding.

Prevention is better than cure, and being aware and informed is the best protection.

To avoid unwittingly becoming involved in money muling, here are a few principles to bear in mind:

  • Be wary online!

    • Don't respond to suspicious job offers or online solicitations that seem too good to be true.

    • Check job offers: if a job offer involves financial transactions, it is important to check the legitimacy of the company and the transactions. Generally speaking, a legitimate company does not ask its employees to handle funds in a dubious manner.

  • Beware of unsolicited money transfer requests.

  • Know your sources of income: make sure you know the origin of the funds you receive or transfer via your bank account (or payment card). If in doubt, try to confirm the source of the funds.

  • Protect your financial information: never share your bank details or other sensitive data with strangers.

  • Protect your online accounts with strong passwords and prevent third parties from revealing them (e.g. never write down your codes on paper, enter your codes away from prying eyes).

  • Refuse unexpected requests for financial assistance: be on the alert if someone asks you for a money transfer in a hurry.

  • Find out more about money laundering!

    • Recognise the signs!

    • Be aware of the risks involved in handling money for third parties.

Contact the authorities (police, public prosecutor's office) if you think you have been the victim of fraud or if you think you have been used as a money mule, and immediately stop all transactions and cut off contact with the person who hired you.

Méfiez-vous ! Une offre trop belle pour être vraie, c’est forcément une arnaque !

Consequences of money muling

Money muling is an illegal activity that can have serious consequences for those involved, even if they claim to be innocent.

Anyone who makes their account and/or bank card available to third parties in exchange for financial remuneration for fraudulent transfers of funds can be prosecuted under criminal law. In Luxembourg, prison sentences ranging from 1 to 5 years and fines ranging from EUR 1.250 to EUR 1.250.000 can be imposed for such criminal activities.

How can your bank help you?

Banks play a major role in preventing money muling and illicit activities.

A few sophisticated processes have been put in place to prevent these crimes:

  • Transaction monitoring,

  • Data verification (on account opening and for major transactions),

  • Raising awareness through articles, messages, and training,

  • Reporting suspicious transactions to the authorities (the bank is obliged to report suspicious transactions to the relevant authorities),

  • Filtering of international transactions that can detect suspicious transfers of funds (prevention of money laundering and financial crime),

  • Working with the authorities in the event of a financial dispute.

In any case, if you have any doubts or concerns about transactions on your account or requests for transactions that seem suspicious, do not hesitate to contact your bank.

Effective prevention requires good cooperation between the customer and the bank.
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