When thinking about financial fraud, you might picture a hacker stealing funds or an organized crime ring operating behind the scenes. What is often overlooked is that many scams use ordinary people to move stolen money. These individuals, known as money mules, are often recruited by criminals—sometimes without the mule understanding that anything illegal is happening.

Recently, the FDIC Office of Inspector General issued a public service announcement about money mules highlighting how common and damaging these schemes have become.

Common Scenarios

You receive a text from an unknown number offering you a job that requires very little effort. In exchange for a few hours of work, the message states that you will be paid thousands of dollars each week.

On an online dating website, someone messages you claiming to have issues depositing cash into their bank account. They ask if they can send it to you to deposit into your personal account and then transfer the funds back to them. They may even offer to give you a portion of it as a token of their appreciation.

In both examples, a criminal is attempting to recruit you as a money mule.

How It Works

Criminals use money mules to move the proceeds of fraud, scams, or other illicit activity through the U.S. financial system in order to hide criminal activity. Money mules fall into two categories: those who know they’re involved in fraud and those who don’t. Individuals who are unaware are often recruited through deception.

Common tactics target people looking for remote job opportunities, students, individuals involved in romance scams, the elderly, and those experiencing financial strain.

Once the money mule receives the funds or physical assets (e.g. gold, cash, etc.) from the third party, they are typically instructed to withdraw the cash, buy cryptocurrency, purchase gift cards, conduct a wire transfer, or even physically drop off the assets to the criminal or another third party. By filtering the illicit money through your account, the criminal can conceal its origin, allowing them to continue committing fraud.

Warning Signs

By knowing the warning signs of money mule activity, you can help protect yourself from becoming involved and avoid supporting fraudsters’ illegal activity.

• Don’t open a bank account or move money at the direction of someone else.
• Don’t allow money from people you don’t know to be deposited into your account.
• Don’t take a job that promises easy money for little work, especially if it requires using your own bank account or opening a bank account specifically for funds transfer processing.

The Risk of Being a Money Mule

While in many fraud cases, the victim may not be held responsible, money mule fraud is different. Acting as a money mule is illegal, whether someone is aware of the fraud or not. Money mules can be prosecuted for their participation in money laundering, personally liable for repaying victim’s losses, and potentially incarcerated.

Reporting

If you believe you have been in contact with a scammer, follow these steps.

1. Immediately end the communication and stop transferring money.
2. Call your bank, the wire transfer company, gift card provider, or any other payment service provider involved right away.
3. File a complaint with the FBI’s Internet Crime Complaint Center (IC3).

One way these criminals continue to find success in these schemes is due to a lack of reporting. While it may feel embarrassing to admit that you have been scammed, reporting the fraud may help track down the criminal and make others more aware of fraud tactics.