What’s a money mule, and how to avoid being one
December 28, 2022 • 4 minute read
What's a money mule?
Have you ever heard the term “money mule?” It’s used to describe a particular role in money laundering and is often associated with various types of cybercrimes and scams.
The money mule helps transfer and launder money that’s been acquired illegally. The money may have been acquired through drug or sex trafficking, scams such as technical support scams, lottery scams, IRS or other government imposter scams, or other types of crimes. Once the criminal has the funds, a money mule is asked to transfer those funds through different accounts to help obscure the original source and hinder tracking.
Sometimes the money mule knows they’re involved in an illegal activity; sometimes they don’t and have accidentally gotten involved through a scam. In both cases, acting as a money mule is considered money laundering and fraud.
There are many ways to scam people into being a money mule. Most often, criminals begin by creating a false sense of trust.
Two common types of money mule scams
Work from home and other job scams: Imagine finding a job online; perhaps it was even posted on a job board. It sounds easy. You can even work from home. All you have to do is facilitate the transfer of funds from your employer to a client. Don’t do it. A legitimate employer will never ask you to transfer funds through your bank account or ask you to open a new bank account.
Love and romance scams: Believe in the power of love, but don’t believe in anyone who sends you money and then asks you to forward it somewhere else, especially if you haven’t spent much time together or haven’t met in person. Don’t fall for it.
Common money transfer methods
Any kind of request to process or transfer funds from someone you haven’t met in person should be suspect. Requests may involve:
- Peer-to-peer payments, such as Venmo
- Your personal bank accounts
- New accounts opened in your name
- Wire transfers, such as Western Union
- Checks
- Gift cards or prepaid debit cards
- Virtual currency
- Package shipments
Consequences of being a money mule
The FBI makes it clear that acting as a money mule is illegal, even if you’re tricked into it. The consequences could involve federal charges for mail fraud, wire fraud, bank fraud, money laundering and other crimes.
In addition to potential criminal prosecution, your bank accounts may be frozen during an investigation, jeopardizing your credit, and there is even an increased risk of your personal information being stolen.
What to do if asked to be a money mule
- Stop communicating
- Do not forward any funds you may have received
- Contact law enforcement
- Contact your financial institution
No one is immune to any type of fraud. Be aware of anything that seems suspicious and if you’re ever concerned that you or your WSECU accounts have been scammed or compromised, contact us right away.