Don't Be a Money Mule

A new year is upon us, but unfortunately the same worries continue with protecting yourself from fraud.

So, throughout the year, we’re going to be blogging each month about a different fraud-related topic to help you learn how to protect yourself from becoming a victim of – or even an unwitting accomplice in – fraudulent activity.

This month’s topic is an odd name with serious ramifications: money mules.

The Secret Service defines money mules as “individuals who transfer illegally obtained money on behalf of others using bank accounts, wire transfers, money orders, or checks.”

Here’s where it gets really frightening: Money mules may not even know the money they are transferring has been illegally obtained.

It happens in a variety of ways, both as one-time events and ongoing transactions.

• Several of these frauds include receiving and cashing a check and transferring the funds before realizing the check is bad. Be careful if you receive payment in the form of a check before performing any work.
  • In one, you receive a “payroll” check as a “secret shopper.” As a shopper you are asked to shop a service that requires you to send money to someone.
  • In another variation, you receive money via a check and are asked to forward the money.
• You are offered a role in an investment business, but you must use your personal account. You receive money into your account from “clients” and then are asked to transfer the funds to another account to invest the funds. You receive a payment in exchange for your assistance in moving money. You don’t know where the funds are coming from or where they are going, but you are, in fact, helping launder illegally obtained money.
• You “win” a sweepstakes and receive money and must pay taxes or other fees associated with your winnings. Your winnings serve as a “payment” for your role and the “taxes and fees” you pass along help launder illegally obtained money.
• You are involved in a romantic relationship with someone who is unable to open an account of their own for some reason. They ask you to use your account to receive money and transfer it to someone else. Usually, in this ruse they tell you that you will be helping others. Be cautious if someone tells you they are not able to open an account or conduct their own banking.

If it’s not scary enough that you could have money stolen from you in some of these circumstances, it’s also possible that you could be arrested and prosecuted for playing a role in schemes like these.

It’s so serious that the Secret Service even has a commercial about avoiding being a money mule. They also offer a few tips about how to protect yourself:

• Never respond to an offer to earn quick and easy money.
• Never agree to receive and send money on behalf of others.
• Never share your account or personally identifiable information.
• Never open a joint account with anyone other than close family.

Look for additional posts about how to protect yourself from falling victim to schemes each month.