Would You Know How to Spot a Money Muling Scam?
Last week, our organization partnered with ONEGeneration and the FBI’s Los Angeles Community Outreach Program to bring you the word on money muling in a special online presentation, “Don’t Be a Money Mule.” This presentation couldn’t have been possible without the generous time and commitment from the FBI Specialists from the Money Laundering, Forfeiture, and Bank Fraud Unit.
So What’s a Money Mule & How Does It Work?
By definition, a money mule is someone who moves proceeds or money to a criminal unknowingly (or in some cases knowingly). The criminal act of transferring funds illegally can happen in a few ways, but the most common is through wire transfers.
Criminals recruit money mules to participate, following a three-cycle process: (1) placement, (2) layering and (3) integrations.
During this initial phase, a criminal sends money to a money mule’s account, thereby adding a layer of protection in between themselves and the victim. Examples of this type of layering includes money transferred from someone’s savings account or college fund.
During this second phase, the criminal uses one or two money mules to keep the proceeds flowing across accounts. Between 80-95% of mule accounts were used for only one transaction.
This is the last phase whereby the criminal uses the illegal funds to purchase goods that are harder to track, or pushes the funds offshore into an account across international borders. Examples of purchases criminals commonly make with these funds include cars, houses, or jewelry.
Money mules can fall into three possible categories:
Where Do Criminals Recruit Mules?
Nowadays, cyber criminals leverage a few methods to recruit money mules. Some examples include online job boards, romance websites, lottery or sweepstakes games, or work-from-home environments to scam unwitting participants through seemingly normal business methods.
The latter example is called business email compromise (BEC), which unfortunately is a common scam type used on United States businesses. In this scenario, a criminal impersonates a fellow colleague within the organization across the finance or accounts receivables department and requests the passing of funds to an account or receive funds in a personal account. In some cases, the criminal will impersonate high-level leader within the company, making it challenging for lower-level employees to decline requests for funds.
Did You Know? California, Florida and Texas make up about 50% of all BEC attempts in the United States, according to the FBI.
Another type of scam approach is email spoofing. In this scenario, a criminal leverages a normal-looking email address with a twist: there’s an error or spelling mistake difficult to spot on first glance. In doing this, the criminal tricks the recipient of the email into sending money to an email address that appears to come from a trusted source.
What Has Money Muling Changed?
The FBI has seen a few changes over the past couple of years thanks to changes in adopted technologies and practices by cyber criminals. The increased use of bitcoin and bitcoin ATMs is in part due to the increasing popularity of the untracked online currency. Similarly, the move to technology has resulted in a higher use of recruitment through video portals such as Google Hangouts.
Did You Know? Only 10% of money mules actually meet their perpetrators in person, suggesting a longstanding history of predominately online activity.
The COVID-19 Factor
Thanks to the ongoing COVID-19 pandemic, the move from a commuter lifestyle to a virtual work environment resulted in an increase in the onset of money muling schemes across work from home activities. Similarly, the social shift from from in-person dating activity to an up-tick in online virtual dating apps resulted in an increase in romance scams. Women ages 52-75 years are the most susceptible to be approached and fall victim to criminal recruitment for money muling through romance scams.
For many people, the pandemic also translated to unemployment, salary cuts, or a sudden slip into poverty. For these reasons, money muling criminal schemes found opportunity across lottery or sweepstakes games to take advantage of an increasingly financially desperate populating.
How Can I Tell If I’m a Mule?
Suspicious activity can be identified through due diligence and education around common tactics used by criminals. What type of activity should you keep in mind as potentially suspicious?
- If you’ve received an outreach via social media or an email promising easy money for little or no effort
- If you were asked to receive funds and/or transfer funds as an employee of an organization
- If you were told to keep a portion of the money for yourself as a reward
- If your online companion, whom you met through a romance website or app, asked you to receive money in a personal account or distribute money from a personal account
What Do I Do If I Think I’m a Victim of Money Muling?
If you believe you may be a victim of money muling, be sure to follow these steps:
- Stop communicating with the suspected criminal
- Stop sending money to the suspected criminal
- Notify your local law enforcement and report the suspicious activity to www.IC3.gov, an FBI-dedicated online resource for the capture and reporting of cyber crime complaints and activities
We also encourage you to visit the FBI’s Scams & Safety page on Money Mules to learn more about the practice. You can also download the Money Mule Flyer and Romance Scams Tips to prepare yourself with the latest practices in avoiding scams.
This presentation was made possible with the help and time from our founder, Kimberly Lewis, partner Jenna Hauss from ONEGeneration, and FBI Community Outreach Specialists, Martice Hawkins and Erica Nieves. We also want to give a special thank you to Nathan Cocklin, FBI Organized Crime Unit Special Agent for his stellar presentation and dedication to fighting cyber crimes.
If you’d like to volunteer with I Did Something Good Today Foundation through efforts similar to our “Don’t Be a Money Mule” online presentation, or work with seniors through our GoldenTALK chat line, you can sign up through our volunteer page.