How to identify “money mules”

The current situation in the world has had negative consequences for many – people have lost their jobs and are seeing sharp drops in income. However, one area where “job offers” have definitely increased is money laundering. Criminals are more frequently looking for “money mules” – people who allow foreign money to be transferred through bank accounts opened in their own name and are paid for their services.

The Bank of Lithuania warns people to be careful, and not to be tempted by offers to open an account and allow other people to use it. The Association of Lithuanian Banks provides advice on how to protect yourself from criminals and avoid becoming a money mule.

In some cases, organised groups “hire” people who know and understand what they will be doing. These people are trained so that they know what to do and how to behave to avoid the attention of financial institutions and law enforcement authorities. The first step is usually to open an account with a financial institution; shortly thereafter, money of uncertain origin is transferred to this account. The new “employee” then transfers this money to accounts controlled by criminal groups. These scenarios are common and are easily recognised by financial institutions.

However, things are much more complicated when people become money mules without knowing it.

In these cases, criminal groups lure victims by posting fake job offers or easy ways to make money fast. Those who take the bait usually already have payment accounts opened, where the bank or financial institution has already carried out identification and verification. Often, these individuals are classified as low- or medium-risk.

What factors indicate that a customer of a financial institution may be a money mule?

  • The nature of the customer’s money transfers has changed

Keep an eye out for unusual cash flows in the customer’s day-to-day activities. For example, a customer who receives a regular salary unexpectedly receives payments from unusual sources. Or payments are made from high-risk jurisdictions. Or the customer receives a money transfer and then transfers the money (or part of it) to one or more different bank accounts. Note whether these transfers have an economic basis or are related to the customer’s activities. Money mule operations are characterised by frequent cash inflows (transfers or cash deposits) and further transfer of these funds to other people’s accounts.

  • Incoming payments come from high-risk countries

Payment transfers from high-risk countries always require more vigilant attention from financial institutions. If such financial transactions become more frequent, why the customer is receiving these funds must be ascertained. Customers who have become money mules without knowing it should not conceal the fact that they were asked to provide their account numbers.

  • The customer is making transfers to countries that are considered to have weaker anti-money laundering controls

Employees of financial institutions can identify money mules by monitoring where money is sent. It is likely that funds will be transferred to countries with low ratings for preventing money laundering and terrorist financing. When a financial institution determines that funds are moving to higher-risk jurisdictions, the customer should be asked questions to determine the sources and purpose of the money.

 

We recommend that you take into account the specifics of money laundering through money mules, and programme automated financial transaction monitoring tools to effectively identify suspicious activity. And be sure to communicate with the customer: not only will this help prevent money laundering – but it will also protect the interests of the customer, who may be a victim of fraud.

Experience