It's Illegal to Be a 'Money Mule,' Whether You Know It or Not
In 2022, BioCatch, a software company that delivers advanced fraud protection, estimated that there are approximately two million mule accounts in the U.S., and about $3 billion in fraudulent transfers a year. The same research estimates that scammers are lowering their transaction amounts to mules to an average of $1,500 to avoid detection by traditional means. They are also upgrading their methods by using hybrid bots that allow them to open multiple mule accounts at scale.
What is a money mule?
To understand what a money mule is, you first need to know what money laundering is:
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As we’ve previously covered, money laundering is the process of making money obtained through illegal means, e.g. drug sales, look like it was legally earned.
A money mule is the scapegoat for the criminals. Mules end up moving money of a criminal scheme from one place to another, hence the “mule” part. They usually receive money and transfer it into another bank account, or gives up control of their bank accounts to scammers. Obviously, letting your parents have your bank password so they can move money around doesn’t constitute as money laundering—you’d need to be helping someone move money around to make it harder to track where it came from.
There are different types of money mules, and they all have different repercussions depending on their awareness of the criminal act:
Unwitting money mule: An unwitting mule is someone who doesn’t know what they’re doing and is unaware that they’re a part of a crime. They’re usually recruited online through “job offers” that seem legit, but just pay exorbitant amounts of money for doing tasks like opening bank accounts “for the company” under their own name. They can also be persuaded via online romance scams, like the pig butchering scam. Most of these victims are students, people looking for work, people struggling financially, or people on dating apps. According to a 2020 report from Barclays, the number of people under 21 recruited as money mules has more than tripled in the years leading up to the study.
Witting money mule: This is someone who ignores all the red flags or pretends not to know that they’re part of a money-laundering scheme. These people usually start off not knowing, but as time goes on they eventually catch on to the scheme, but then continue on with it. Sometimes they are warned by their financial institutions but disregard the warnings or take steps to look less suspicious.
Complicit money mule: These people are aware of the part they’re taking and decide to take an active role in money laundering anyway. Some advertise their services and recruit others.
How are money mules recruited?
There are four main types of ways people are recruited to be unwitting money mules:
Remote work: Often, these “job offers” will promise a lot of money for very little to no effort, but are not from legitimate companies or jobs.
Gamers: Scammers get gamers to transfer their dirty money to in-game currency, then buy weapons or power up their avatars with the intention of selling these characters for in-game virtual currency. They typically sell on secondary markets like eBay or player auctions. These micro transactions are difficult to detect because of their lack of regulation.
Dating apps: Scammers will form relationships with victims for months or even years. Once they build enough rapport, they start asking for “money favors.” (Obviously, don’t send or receive money from someone you just met online, especially if you’ve never met them in person.)
Sweepstakes “winners”: This is when you might win a contest or sweepstakes you never entered, or you enter one and win right away. You’re instructed to deposit the money you’ve been sent into your personal bank account, keep a portion, and send the rest back. These kinds of scams are called “prize scams.”
Recognize the red flags of money laundering scams
If employers use free personal email services (Gmail, Yahoo, Hotmail, Outlook, etc.), be suspicious. Most legitimate employers will have their own custom email domains, like “@lifehacker.com.” Often times, these job postings will be on apps that are not well vetted for legitimacy, like Craigslist or Facebook.
If the company or “job” tasks you with opening a bank account under your name for whatever reason, your spider senses should similarly go off. The tricky part is that they’ll usually try to disguise the task as a legitimate task for the company, but a legitimate business has no reason to ask employees to do such things.
If the company gives you money with the condition that you process or transfer the money out somewhere else, that’s the definition of money laundering. They might suggest wire services, mail, Western Union, MoneyGram, PayPal...the list goes on. The scammers will try to entice you by telling you to keep a portion of the money.
If a person you’ve been forming a relationship online but whom you’ve never met in person before asks you to receive or move money (it could be masqueraded as a personal favor or some other creative way), consider it a red flag.
What are the consequences of being a money mule?
Being a money mule is illegal, and you can be prosecuted and incarcerated as part of a criminal money laundering conspiracy regardless of whether you were aware of it or not. Depending on what type of money mule you were and what activities you did for the scammers, you could be federally charged for mail fraud, wire fraud, aggravated identity theft, bank fraud, or money laundering. Not to mention, you run a high risk of getting your personal information stolen and used for other illegal activities. Being a money mule could also ruin your credit, and you could be held personally liable for whatever money victims lost in the crime.
What to do if you think you’re an unwitting money mule
The FBI has guidelines of what you should do if you think you’re being used as a money mule. They include:
Stop communication with the scammers.
Stop transferring money or any items of value immediately.
Document all communications with the scammers, including emails, texts, chats, etc. and keep all physical evidence like receipts.
Notify your bank or whatever money service you used to conduct transactions.
Notify law enforcement. You can report the suspicious activity to the FBI’s Internet Crime Complaint Center (IC3) at ic3.gov, and contact your local FBI field office.
And always remember that if any job, deal, or online relationship seems too good to be true, it probably is.
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