Money mules can face harsh penalties whether complicit or not

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Are you transferring money for someone you have only met online?

If so, you may be committing a crime and be one of hundreds of people classified as “money mules.”

Federal agencies recently announced the arrests of several people connected to fraudulent practices involving the use of third parties — some of them ordinary folks — to conduct money transfers between nefarious bank accounts using the third party’s own bank account.

These third-parties have become known to law enforcement as “money mules.”

The FBI defines a money mule as a person who transfers illegally acquired money on behalf of or at the direction of another. Money mules often receive a commission for the service or provide assistance because they believe they have a trusting or romantic relationship with the individual who is asking for help.

On Sept. 10, the U.S. Department of Justice announced the arrests of 281 people — 74 in the U.S. — across the world during Operation reWired, a coordinated enforcement operation designed to disrupt and dismantle international Business Email Compromise schemes.

The operation resulted in the seizure of nearly $3.7 million and the disruption and recovery of about $118 million in fraudulent wire transfers.

“The money often comes from a wide variety of criminal schemes,” said Paul Brown, assistant special agent in charge at the FBI Phoenix Field Office. “It could be simple business-involved compromising. Fraudulent transfers, whether it’s real estate transactions, business transactions. But sometimes the money mules are used to launder other criminal illicit funds. Human trafficking, drug sales. The variety really is endless anytime they need to launder some of that money and divert it through a couple of accounts before it goes into a criminally controlled account — typically overseas that happens.”

The FBI Phoenix Field Office is one of the agencies involved in Operation reWired. However, while Mr. Brown says no arrest were made out of Arizona, the agency has issued warnings to several Arizonans whose financial transactions have led authorities to label them as possible money mules.

In turn, the Phoenix agency is also seeking to raise awareness and educate the public about Business Email Compromise scams and money mules.

“At the end of the day, they just prey on human nature, primarily,” Mr. Brown said about money-money masterminds. “Whether it’s a business scheme, where they’re posing and appear very legitimately to be maybe the CEO or president of a corporation, asking them to wire funds in an exigent circumstance and they feel the need to act and comply quickly.

"Whether it’s the stress of purchasing a home and they receive what appears to be legitimate instructions on where to route the money at the last minute. Or it’s a scheme built on trust, where its an individual they believe they have legitimate feelings for, and a certain level of trust and they’re asked to route this money through their accounts.

“All those at the end of the day just prey on human nature. And many of them are very sophisticated and appear very legitimate.”

Whether complicit or not, money mules are facing fines and prison time if they’re caught.

“That is the message we send out to those folks,” Mr. Brown said. “Whether you realize it or not, whether you’re complicit and witting or not, you are committing criminal activity. The penalties are significant. Thousands of dollars in fines and up to 20 to 30 years of incarceration. The violation does not require them to be witting or realize exactly what they’re involved in. But through the admonishment, it’s an opportunity for them to realize to cease all other criminal activity.”

Special Agent Jennifer Boyer, who worked the case out of the FBI’s New Haven Field Office, encourages anyone who is in a position to wire money to pause and question all requests before hitting send.

“If you saw the email, it would look very legitimate,” Ms. Boyer said about a recent case. “Take a moment to consider that maybe it’s not your boss and pick up the phone and verify. It’s that second-factor authentication that people really need to implement, and so many people don’t.”

During the operation, the FBI conducted more than 300 interviews with individuals who had been flagged by financial institutions for activity that indicated they were acting as money mules. The stories they relayed to agents helped draw a picture of how these individuals, who span every race, gender, and age demographic, are recruited and used.

Of note, a female who worked in early childhood education met a man on an online dating site. He was kind to her and told her he worked for a children’s charity. A few weeks after they began talking, the man asked the woman to receive some money into her account for his charity.

Over the next several weeks, he tried to wire a total of $250,000 into her account. He then instructed her to wire that money into other bank accounts or obtain cashier’s checks and mail them to individuals at his direction.

On another dating website, a man met another man who claimed he was stationed overseas as a captain in the U.S. Army. The “Army captain” told the man he was trying to arrange his travel home to the U.S. and needed the man’s help in receiving some money and sending it elsewhere. The man had $10,000 wired into his account and was instructed to withdraw the money in small chunks and send it to a woman in Texas.

In yet another case, a retired advertising executive was looking to earn extra money and found a “work at home” opportunity online. He was hired and directed to create a business, and open a new bank account for that business. He was then told he’d receive a series of deposits and would be instructed where to send the money.

While agencies provide multiple tips for people to determine whether they’re being drawn into these criminal acts, Mr. Brown said the main one to keep in mind is that no legitimate business is going to contact people online and ask them to set up their own business and account to route money.

“If an individual is asking you to allow your personal accounts to be used to route their money, that might be a strong indication that you might be involved in something you shouldn’t be.” Mr. Brown said. “I would advise anybody that finds themselves in that situation to immediately contact their financial institution as well as law enforcement. The best way to report that is through the Internet Crime Complaint Center at ic3.gov.”

Mr. Brown advises individuals to be mindful of what they click on, the attachments they open, and the sites they visit online to reduce the chance their systems and computers are compromised.

“The second thing, always verify these transactions,” he said. “If an individual receives instructions to wire funds to change the routing information for their real estate transactions, contact the individual to verify these transactions. Call your title company, contact that individual in the organization that you believe is directing this wire transfer and verify these transactions directly with the individual involved.

“And lastly, if individuals find themselves victimized, time is of the essence to get their funds back. The quicker they contact their financial institution and report this to law enforcement, the more likely their funds can be froze and then returned to the victim.”

Why do criminals use money mules?

Speed: They believe directing victim funds through money mules is faster than law enforcement can keep track of.

Low Cost: If the money mules takes a percentage, this is victim money which never belonged to the criminal.

Low Risk: Each money mule adds one more level of distance between victims and criminal actors.

Evolution of Crime: Criminals adapt their behaviors based on improvements in law enforcement and financial sector practices.

Reporter Chris Caraveo can be reached at 623-876-2531 or ccaraveo@newszap.com. Follow on Twitter @ChrisCaraveo31.

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