A money mule is someone who transmits money obtained illegally on behalf of another in person, through a courier service, or electronically in exchange for a fee. Money mules are not directly involved in the crimes, but they are complicit in the sense that they launder the revenues of such crimes. Money mules, on the other hand, assist criminal syndicates in remaining unknown while transporting payments throughout the world.

What is a Money Mule?

A money mule is someone who strives to conceal the source of income obtained through unlawful means. Mules launder money on behalf of others to make it more difficult to track down the intended receivers of the ill-gotten gains. This is a serious crime.

Money mules and mulling are also known as squaring, money laundering, and layering, and there are particular strategies, such as smurfing.

Money mulling is mainly done on purpose, however, it is possible to become a money mule unknowingly.

Although money mules did not steal the money in issue and typically do not know where it came from, their action is nonetheless illegal, and they are frequently found involved in money laundering operations.

Who is mostly targeted? 

Criminals usually target young individuals because they are more vulnerable. They find them on social media and entice them with free money. According to research, the majority of money mules are under the age of 21. Aside from students, many individuals are after crooks. As an example:

• Foreign visitors to the nation
• Migrants
• Unemployed individual
• Those looking for work

People under the age of 35 are the most likely targets. Criminal organizations have recently begun to recruit young people aged 12 to 21.

What should banks do to prevent these Money Mules?

All firms subject to anti-money laundering legislation must take precautions to avoid money mule behavior and money laundering in general. As an example:

• Building societies and banking institutions
• Fintech companies and investment businesses
• Forex and cryptocurrency brokers
• Real estate agents
• iGaming businesses

The requirement for an entity to meet AML standards is determined by local legislation. Generally, this refers to companies that hold, transfer, or assist people and corporations in moving huge amounts of money. This does not only apply to banks. Money laundering criminals frequently target gaming websites, for example.

Each nation has its AML legislation, regulators, and oversight agencies, such as the OCC in the United States, the FSA in Japan, the EBA in the EU, and the FCA in the United Kingdom.

However, there is the FATF – the Financial Action Task Force, a worldwide intergovernmental organization founded in 1989 with 36 member countries. FATF establishes rules and facilitates collaboration in the fight against money laundering, money mules, and terrorism funding.

More than 200 nations and jurisdictions have pledged to adopt its recommendations, the most recent version of which is FATF Recommendations 2012, which will be updated in June 2021.

Businesses that fail to comply with this regulation risk prison time, fines, and reputational harm.