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Money Mule Scams

It’s a terrifying thought that you could go to jail for a crime you didn’t even know you committed. Unfortunately, that’s the reality for many victims of money mule scams. Here’s what to know about money mules, how fraudsters find them, and how to catch and stop these scams.

What is a money mule?

A money mule is any person who moves, hides, or launders stolen money or products for someone else. Whether they’re aware or not, any person acting as a mule is still considered one by authorities.

Criminals recruit money mules using many scams—sometimes even making them a knowing partner in crime. In most cases though, money mules don’t know they are one. In fact, they might not even know being a money mule is a crime at all.

Victims may be asked to move money through bank accounts, cashier’s checks, pre-paid debit cards, and even cryptocurrency. By having the mule move money for them, criminals add a layer of protection that makes it harder for legal entities to find the true source of the funds.

Money Mule Scams

Money mule scams prey on the emotions of the victim. In most money mule stories, scammers use social engineering and the internet to recruit mules.

Here are some of the most common money mule scams:

  • Romance scams

In a money mule romance scam, the scammer contacts the victim posing as a potential romantic interest. They typically target widows or the elderly, posing as foreign nationals or military. First, they take advantage of the victim’s loneliness or need for love to build trust. Then, they begin asking the victim to transfer money for them. The victim often believes they are helping their “love” with business expenses or other government fees.

Many romance scams involve several different mules transferring money to each other. Scammers will only communicate through text and use fake pictures and sympathetic stories to keep the scam alive as long as possible.

  • Job offer scams

Job offer scams start with fraudsters posing as employers offering high-paying, work-from-home jobs. They might advertise positions like “money transfer agent” or “financial coordinator.” To run the scam, they need access to the money mule’s bank account to receive and transfer funds. This disguises the illicit origins of money and puts the mule as the owner of it. In some cases, this also involves Bitcoin or other cryptocurrencies to move money.

  • Lottery or prize scams

In these scams, fraudsters tell a victim they’ve won a lottery or sweepstakes prize. All the victim needs to do is share their bank account details or open a new account to get the money!

Of course, once the scammer can access the account they use it to transfer illicit funds. They promise the victim a share of the money, but this leaves the victim as an unwitting money mule.

  • Reshipping or Package Forwarding Scams

In these scams, fraudsters trick mules into receiving and forwarding packages to other addresses. The packages often contain goods purchased with stolen credit cards or stolen outright. These scams often are rolled in with other money mule scams.

The money mule receiving and resending the package evades detection for the scammer and puts them on the hook for moving illicit goods.

Money mule red flags

  • Unsolicited job offers with vague job descriptions

Get a job offer out of the blue promising easy money working from home? Be cautious and investigate the employer carefully. Legitimate companies don’t randomly contact individuals with vague job offers. But money mule scammers do often.

Likewise, roles that involve receiving funds into your personal account and transferring them are a bad sign. Unless there’s a clear explanation of the purpose or legality of the transactions, it’s likely a scam.

  • Poor communication or grammar

Poor grammar and spelling mistakes used to be a calling card of fraudsters. Because they’re usually translating their scam messages to English, the message quality is lost. But thanks to Chat-GPT, fraudsters can spin up perfect-sounding phishing or scam emails in seconds. Be extra careful even if a message sounds legit. And remember, if something sounds too good to be true, it most likely is.

  • Pressure to act quickly

Scammers lean on creating a sense of urgency to pressure victims into hasty decisions. They claim that an opportunity is time-sensitive. They’ll say they have limited job positions available. All this is to prevent you from thinking too much about how fishy things appear. A legitimate opportunity will allow you the time to research and make informed decisions.

  • Requests for personal information

Scammers ask for things like bank account details and Social Security numbers quickly—and without a valid reason. Unless you know why someone needs it, never share this information online.

  • Unusual payment methods

One hallmark of money mule scams is the fraudster asking the mule to receive funds through unconventional means. Cryptocurrency transfers, money orders, or wire transfers are all favorites to hide the source of funds. Don’t trust people who reach out and prefer these means without a reasonable explanation.

  • High-risk countries

If the individual or entity contacting you is based in a country known for money laundering, exercise extreme caution. Be especially wary if transactions involve countries you have no legitimate connection to.

How do money mules get caught?

Law enforcement agencies actively work with institutions to investigate transactions for suspicious activity. Additionally, reporting by financial institutions and banks is required to comply with anti-money laundering (AML) regulations. This cooperation allows banks to alert authorities to potential money mules. The FBI will step in to help catch scammers once a mule is discovered.

In some cases, victims of money mule scams may realize they have been deceived and report the incident to law enforcement. This can crack investigations by revealing crucial details about the scammers involved.

Increased awareness about money mule scams has led to better education and prevention measures too. Authorities find and take down fraudulent websites and ads scammers use to recruit money mules.

AI and machine learning also empower fraud detection and help institutions spot money mules. Through tools like device fingerprinting and real-time monitoring, mule activity can be revealed and prevented.

Can you go to jail for being a money mule?

Yes, being a money mule is a criminal offense and can land you in jail. It can also result in heavy fines as repayment for other victims. Most money mules are charged with money laundering. However, other charges like mail fraud, wire fraud, bank fraud, or even identity theft can apply depending on the type of scam the mule was caught in. The severity of the punishment depends on the jurisdiction, extent of the mule’s involvement, and the specific laws violated.

How AI finds money mule scams

AI tools have the ability to scan massive volumes of financial data for suspicious activity. That makes them the ideal tool to find money mule behavior.

Behavioral analysis tools can spot transaction patterns, pick out anomalies, and alert institutions to take a look. It quickly catches things like frequent transfers to different accounts or sudden spikes in activity.

AI systems can also analyze connections and relationships between different entities, such as individuals, bank accounts, and IP addresses. This builds a fingerprint of the fraudster and tracks their movement online. Since money mule networks often involve multiple actors, AI can identify suspicious links or networks of related accounts based on similar patterns of behavior.

Machine learning algorithms can learn from historical data and detect emerging patterns of fraudulent activities. These models also adapt and evolve over time to identify new tactics employed by money mule scammers.

The best AI fraud prevention solutions can accomplish all this and more in real-time. That makes fraud prevention as fast, and sometimes faster, than the fraudsters themselves. DataVisor’s platform can identify fraud in milliseconds while reducing false positives by over 50%. It’s also built to detect new threats and improve on legacy solutions. To learn more about how DataVisor can help you detect money mules, book a personalized demo with our team.