Money Mules: The Scammers’ Next Step

Author

Michael W. Kahn

Michael W. Kahn

Nacha

Once scammers get a victim’s money, they’re far from done. They often need to move the money—and they’re not going to do it themselves. That’s where they employ the help of others—some knowingly, but many not: money mules. 

“A money mule is someone who transfers illegally acquired money on behalf of or at the direction of another,” according to the FBI’s “Money Mule Awareness” booklet. “Criminals recruit mules to move money electronically through bank accounts, move physical currency, or assist the movement of money through a variety of other methods.”

And while some money mules are as shady as the scammers themselves, authorities say many others are decent people who get tricked into it. 

“Money mule scams happen several ways. The story often involves scams related to online dating, work-at-home jobs, or prizes,” said Lisa Weintraub Schifferle, an attorney at the Federal Trade Commission’s Division of Consumer & Business Education. 

In an article on the FTC’s website, Schifferle said the scammers will send money, and then ask the victims to send some of it on to someone else, often using gift cards or wire transfers. 

“Of course, they don’t tell you the money is stolen and they’re lying about the reason to send it. And there never was a relationship, job, or prize. Only a scam,” wrote Schifferle. 

Not to mention that when a mule is asked to deposit a check, it often turns out to be fake, meaning the financial institution will expect the victim to make good on it. 

The FTC said there are certain red flags to watch out for, including being asked to send money to collect a prize, or as part of a job offer.

In December, the Justice Department announced the results of a two-month effort to “halt the conduct of over 600 domestic money mules.” Attorney General William Barr said in many cases the victims are elderly. 

“Money mules—wittingly and unwittingly—supply the lifeblood of transnational elder fraud schemes. This landmark initiative has significantly impaired certain ways criminals steal from its elderly victims,” said Barr. 

James Abbott, FBI Supervisory Special Agent, said the bureau is “trying to de-stigmatize the idea of being a victim.”

“There's no shame in being a victim. These criminals are very good at what they do and very good at preying on people,” said Abbott, who encouraged victims to reach out to both law enforcement and their financial institution.

And the FTC’s Schifferle offered another reason to speak up.

“The money may be from other people they scammed,” she said. “You may be helping criminals hurt people just like you."

The FBI’s “Money Mule Awareness” booklet explains how the money mule system works, what the ramifications are, and how to protect yourself. The booklet is available on the FBI website.

The FTC has a “Money Mule Scams Infographic” which explains how to avoid becoming a victim. The infographic can be downloaded from the FTC website

Nacha’s Current Fraud Threats page keeps you updated and has many helpful resources.