What's going on this week?

Last month we talked about Vancouver’s Cullen Commission — a public inquiry set up to address money laundering in British Columbia. The commission, which was sparked by official reports like this one, resumed hearings via video conference on Monday. Main highlights include the acknowledgment of money laundering’s unprecedented and enormous scale. The business of money laundering in the Canadian province was called “a cottage industry”, where specialists and consultants help organized crime groups professionally. This second phase of hearings is expected to last approximately three and a half weeks.

This week we continue our discussion on cybercrime, focusing on money mule scams. There are two important pandemic-induced conditions to keep top of mind: unemployment has dramatically gone up and more companies have been permanently shifting to remote-based teams. This has helped create a climate for money mule recruiting, where desperate job seekers navigate a messy terrain of remote work opportunities.

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Remote, Work-From-Home and Money Mules

As more and more people lose their jobs in what has been called the worst recession since the Great Depression, they may be more willing to turn to crime to make ends meet. Facebook groups and unregulated forums are packed with people looking for jobs. Bogus companies and their recruiters entice desperate individuals with promises of easy money for low-skilled online work. Once ‘hired’, these individuals are often asked to deposit and transfer money of illegal origins, aiding in the money laundering process.

Reports have shown that the demographic most susceptible to these scams are young people under 35. Alarmingly, teens make up a rising proportion and are often lured on social media platforms. There has, however been an increase in middle-aged victims, between the ages of 41 and 60. Given the current economic conditions set by the pandemic, it is possible these demographics may change.

So what exactly is a money mule?

Essentially, money mules are individuals who transfer value through laundering illicit funds.

More specifically, Europol defines a money mule as “a person who receives money from a third party in their bank account and transfers it to another one or takes it out in cash and gives it to someone else, obtaining a commission for it.”

Some money mules may be complicit in the operations, while others may be entirely unwitting participants. Either way, they aid the anonymity of criminal groups as they transfer funds around the world.

How does it work?

There are a number of different tactics. As mentioned, a common practice that will probably be exploited more due to economic downturn is through employment scams. The FBI warned of these early last month. Some are fairly obvious, with recruiters boasting simplistic get-rich-quick schemes or sending emails riddled with grammatical errors.

Others are more difficult to detect.

One investigation revealed how cybercriminals spoofed a major nonprofit organization in Canada by copying their website. In the investigation Vasty Health Care Foundation, a fake charity that duplicated the legitimate nonprofit globalgiving.org, posted fake job postings on popular job boards like Indeed.com. The scammers attracted a pool of applicants who were all inevitably ‘hired’ for online customer service representative positions.

These ‘employees’ were first asked to perform menial tasks like inspecting face masks and hand sanitizer products for price-gouging at their local pharmacies. Designed to give legitimacy to the job and build trust, ‘employees’ were then asked to process donations.

They were instructed to accept an online transfer, keep a marginal amount, and process the rest to a Bitcoin wallet controlled by criminals. By acting as a ‘liaison’ for donations, these ‘employees’ become money mules in the money laundering process. You can read the full investigation here.

How big of a deal is this?

It’s pretty big. Late last year, before COVID-19 reached European shores, the fifth European Money Mule Action (EMMA 5) took place with the support of Europol, Eurojust and the European Banking Federation. The international swoop resulted in the identification of 3833 money mules alongside 386 money mule recruiters. 228 arrests were made and 1025 criminal investigations were opened.

The report noted that 2019 saw a trend of romance scams, where online dating sites were the scene of emotional manipulation that resulted in opening bank accounts and sending/receiving funds. 2020 will likely be marked with a new trend that caters to the desperate circumstances of employment seekers.

What should I look out for?

The grave economic climate could create a willingness for people to overlook red flags. Here are 3 red flags that the Federal Trade Commission (FTC) warns against:

• Jobs that ask you to transfer money, whether it be under the guise of a client or supplier.
• Sending money to collect a prize.
• Returning money to an online love interest who had sent you money initially.

There are a number of organizations striving for awareness including Europol, who runs the #dontbeamule campaign. Another organization focused on students and young people is the UK-based Don’t Be Fooled .

Heed their advice: if something seems too good to be true, it usually is.