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.

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 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 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!