From Victim to Criminal: Think Twice Before Assisting Money Movement
You receive a seemingly harmless request through a job posting or from someone you met online. They ask you to allow money transfers to flow through your account. They will even let you keep a portion of the money for your troubles. Easy money. Right? Wrong. You may be helping criminals by acting as a money mule, and you could go to prison. Here's what you need to know to protect yourself and your loved ones from falling victim to money mule schemes.
A money mule is a person who, at someone else's direction, transfers or moves illegally acquired money. Criminals recruit money mules to help launder proceeds derived from criminal activity, such as scams, frauds, and human or drug trafficking. Money mules may get to keep a portion of the funds for their service, which can involve moving funds in various ways including through bank accounts, cashier's checks, virtual currency, gift cards, prepaid debit cards, or money service providers. By using a money mule in this way, criminals add layers of distance between themselves and their crimes.
There are three types of money mules. Unwitting or Unknowing money mules are individuals who may be unaware they are part of a larger scheme. These individuals are frequently solicited during an online romance scam or through a job offer and are motivated by trust in the actual existence of their romantic partner or job position. Witting money mules are individuals who ignore obvious red flags or act willfully blind to their activity. These individuals may have been warned that they could be involved with fraudulent activity and they are generally motivated by financial gain or an unwillingness to acknowledge their role. Finally, Complicit money mules are individuals who are aware of their role and actively participate. They are motivated by financial gain or loyalty to a known criminal group.
Money mules are recruited in a wide range of ways and anyone can be approached to be a money mule- including YOU. Criminals often target:
- Students who may be trusting and in need of easy money
- Newly immigrated individuals, who may be fearful of law enforcement and less likely to report
- Recently unemployed individuals, who may be actively seeking employment
- Senior or vulnerable adults, who tend to be trusting and may be isolated from others
Here are some signs to watch out for in common scams associated with money mule activity:
- Job opportunity: You receive an email or respond to an online job ad or social media message that promises easy money for little or no effort. The job duties may be ill-defined or non-existent and the “employer” uses a web-based email service, such as Gmail or Hotmail.
- Contest or Inheritance: A person contacts you with a claim that you are a winner of a prize or a long-lost beneficiary of a recently deceased “relative” you never heard of. You are informed that you must transfer money to collect the prize or inheritance.
- Romance: An online contact or companion, whom you have never met in person, asks you to receive money and/or packages and then forward these items to individuals you do not know.
Serving as a money mule is illegal and punishable by the law, even if you are unaware that you may be a money mule. The possible criminal charges you could face include mail fraud, wire fraud, bank fraud, money laundering, and identity theft. You may be held personally liable for repaying money lost by victims. Serving as a money mule can also damage your credit and financial standing. Additionally, you risk having your identity stolen and used by the criminals you are assisting.
- Be wary of accepting a job from a company that promises easy money and involves sending or receiving money or packages. A legitimate company will not ask you to do this.
- Be suspicious if an individual you met on a dating or social media website wants you to purchase gift cards or virtual currency, wants you to send or transfer money or valuables, or requests to use your bank account.
- Never send money to collect a prize or to obtain an inheritance.
- Do not open an account or move money at someone else’s direction or allow money from people you do not know to be deposited into your account.
- Maintain receipts, contact information, and communications (emails, chats, text messages, etc.).
- End communication with the person giving you direction and any associated parties.
- Stop transferring money or any other items of value immediately.
- Report the activity to law enforcement and your financial institution(s).
Stay aware. Learning about scams and fraud schemes can help you to spot suspicious activity. Educate yourself by visiting other resources on our SchwabSafe, where you can read additional guidance on avoiding scams and other threats such as phishing attacks, and identity theft.
If you need to discuss concerns or have questions regarding your account, contact your Schwab Financial Consultant or call 800-435-4000.
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