How to Avoid Becoming a Money Mule – And Why You Should Care

A “dream job” could unknowingly make you a money mule – what money mules are and how to avoid becoming one: Internet Scambusters #333

You’ve probably never heard the term “money mule.” Yet, you
may unknowingly become one.

According to one expert, the number of people roped into
becoming “money mules” has soared tenfold in the past five
years.

In this issue, we show how the scammers play on people’s
desperation and naivety to convince them into taking what
seems to be an easy-money job requiring no experience or
qualifications.

Just a quick notice: In Scambusters Issue #313, we talked
about the “red flag rules,” and explained that most of the
enforcement had been delayed. The new date for them to come
into force is May 1, 2009. So we recommend you check out
this article on
the red flag rules now.

Before we begin, you may want to spend a moment looking at
this week’s most popular articles from our other sites:

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target="_blank">eBay Gift Certificate.

Now, here we go…


How to Avoid Becoming a Money Mule — And Why You Should Care


In our recent issue on the huge rise in href="http://www.scambusters.org/jobscams.html">job
scams arising from
the downturn in the economy, we highlighted the employment of
“money mules” — people who “launder” stolen money and the
proceeds of crime.

Though we didn’t use the “money mule” term in that article, we
explained how victims are fooled by the crooks into thinking
they’ve landed the perfect, legitimate work-at-home jobs —
jobs that involve receiving money from customers, deducting a
commission, and then wiring the balance to an overseas
“employer.”

This week, we take a closer look at how and why this scam
works, what you can do to avoid it — and the serious
consequences if you don’t.

What Is a Money Mule?

The term “mule” comes from the narcotics trade — where an
individual is paid to transport illicit drugs for a fee. A
money mule is different — there’s no physical transporting
involved.

But both types of mule have one very important feature in
common — they’re the fall guys, the people who get caught and
pay the penalty. The real crooks stay hidden and get off
scot-free, along with the proceeds of their crime.

Recruitment of both types of mule also rely on the same
weakness of their victims — a need, often a desperate need,
for money, and preferably plenty of it. They may be innocently
fooled into taking the job, they may be slightly suspicious
that something is not quite right or they may fully understand
they’re committing a crime, but do it anyway.

Until recently, money mule jobs almost always surfaced in
spam emails, online or print
advertisements, phone solicitations or as direct responses to
resumes posted online. These “dream jobs” are usually labeled
as being for financial managers, overseas representatives or
payment processors — with no experience needed.

More recently, crooks, masquerading as legitimate business
people, have started popping up in online forums and Internet
chat rooms, bluntly declaring that they’re looking for people
to launder money for them — though they always claim it’s
perfectly legal to do so.

Another new trick is for the scammer to ask a victim to set up
a legitimate, registered company, which they call a franchise,
with its own legal bank account, to receive regular small
payments (from stolen credit cards).

In all cases, they want you to receive money from “customers”
into your own bank account, or a new one specially set up at a
particular bank, or into a PayPal account (from where you then
transfer the cash to your bank account). You keep 10% and wire
the remainder to them — mostly to Eastern Europe, especially
Russia.

How Do Scammers Gain Credibility?

The explanation the crooks use is that, since their business
is based overseas, customer payments cannot be electronically
transferred to them directly, but must go via the account of a
US or UK citizen (depending on which country the scam is in).

They try to establish their credibility in two ways: by
setting up an impressive looking website, often using a name
very similar to that of a legitimate global trading company;
and by sending out a formal-looking employment contract that
calls for personal details and a copy of your passport or
driver’s license.

How Big a Problem Is It?

A 2008 survey by Internet security outfit McAfee found almost
1,000 official-looking money mule recruitment websites online!
Most of these sites quickly disappear after being rumbled.

One expert reckons money mule scams have increased tenfold in
the past five years. According to the Washington Post, several
thousand new money mules, mostly unwitting, are recruited in
the US every year.

If You’ve Become a Money Mule, Here’s What Has Gone Wrong:

  • You’re receiving stolen money. This may be through bogus
    sales from online auctions or the proceeds of phishing, where
    crooks have obtained victims’ bank details and are
    transferring their cash to your account (which is why they
    often want you to open an account at a particular bank — the
    same one as their victims).

    It may even be cash from crime like drugs and prostitution
    that the crooks just want to get out of the country. Or
    someone just sends you a bogus check that you bank and then
    forward.

  • You’re taking a cut of the proceeds of crime and
    transferring the rest via an untraceable money wire to a
    crook.

  • You’ve given away your own personal information in that
    phony employment contract you signed, leaving yourself open to
    identity theft.

What Will Happen When You Get Caught

When you get caught (as you eventually will), the following
things may happen:

  • Your bank account will be frozen and probably closed down.

  • You may be responsible for making good on the losses to all
    the victims whose money you handled.

  • You will lose your “commission” payments because they are
    the result of fraud.

  • Your credit/financial reputation will be trashed.

  • You could go to court and end up in jail.

Meanwhile, as we said, the real perpetrator of the crime
disappears with the loot, and sets off in search of another
sucker.

Now, does that easy-money job sound so inviting? Guess not.

How to Make Sure You Don’t Become a Money Mule:

  • First and foremost, money forwarding jobs like this don’t
    exist. Period. There is no law preventing global companies
    from directly transferring money from one country to another.

  • Never accept payments from anyone and then transfer part of
    the proceeds by money wire.

  • Don’t open a new bank account to receive money from people
    you don’t know.

  • Scrutinize the name of the company offering employment. Go
    to a site like target="_blank">DomainTools.com and check out when the website
    was registered. If it’s a scam, it’ll probably be within the
    prior 28 days.

  • Check the ad or email for poor language and grammar.

What to Do If You Are a Money Mule

If you have become a money mule, as soon as you realize it,
contact both your bank and law enforcement. It may be an
embarrassing and painful situation to unwind, but at least
you’re unlikely to end up behind bars.

Like so many scams, the success of money mule-ing feeds on
people’s desperation and willingness to believe in things that
are simply too good to be true. In this economy, we suggest
you pass on this issue and, who knows, perhaps save someone
from becoming a money mule.

That’s it for today — we hope you enjoy your week!