The Simplest Form of Money Laundering: Use of Money Mules
There are many incredibly sophisticated ways to convert or “launder” illicit proceeds. Laundering money gives it the veneer of having been earned legitimately and enables the launderers to integrate their ill-gotten gains into the stream of commerce and make it indistinguishable from money earned through legitimate means. But some criminal organizations are less concerned about appearances. For them, it is simply about the pragmatic need to physically move hard currency from the various cities where the criminal activity is generating cash back to headquarters. Human trafficking, narcotics sales, cyber crime and prostitution all generates large sums of cash that needs to be laundered and returned to the criminal organization which often is located in a different part of the world.
Enter money mules.
Just as the name suggests, money mules are people who physically transport bulk currency from one place to another. Sometimes, that means hiding as much currency as possible under one’s clothing. Other times, it consists of using time tested techniques developed by narcotics traffickers such as using hidden compartments in passenger cars, truck trailers with false bottoms or inside cargo for export. It can also involve establishing or recruiting account holders of thousands of bank accounts, making deposits below the reporting threshold and then sending wire transfer or ACH payments through a series of bank accounts in an effort to conceal its origins and return the profits to the heads of the criminal organization. It also involves recruiting and exploiting armies of people who are either in a desperate financial situation, indebted to the criminal organization or are recruited under false pretenses. Some are recruited as part of a romance scheme in which someone on a dating website posing as a love interest asks for a “favor”.
Law enforcement across the world have been focusing on disrupting the use of money mule networks as a means of dismantling the infrastructure of criminal organizations. Recently, law enforcement agencies in 25 European countries combined to arrest thousands of people across the world for money-laundering through money mules. The operation ran from September through the end of November and resulted in the seizure of €17.5 million, the identification of over 4,000 fraudulent transactions and the arrest of 2,469 people who were a combination of mules and people involved in their recruitment.
According to Europol who along with Interpol, helped coordinate the operation, money mules and recruiters of money mules are among the “most important enablers of money laundering”. The operation was conducted in a range of countries including Colombia, Singapore, Australia, Cyprus, Romania, the Slovak Republic, and Ireland.
In commenting about the operation, a Europol spokesperson said: “Money mules are a significant part of the money laundering landscape, enabling criminals to swiftly move funds across a network of accounts, often in different countries.
Europol is using the case to raise awareness about how money launderers target new immigrants, unemployed people, students, and people living in poverty to become money mules. For more information about money mules, see the FBI’s public service announcement about money mules here: https://www.fbi.gov/how-we-can-help-you/safety-resources/scams-and-safety/common-scams-and-crimes/money-mules