Dissecting the post-investigation actions on money mule cases in banking financial crime compliance

The money mule phenomenon refers to the increasing use of individuals, either wittingly or unwittingly, to facilitate the transfer of baseless money from one account to another. Criminals use money mules to launder money, evade detection, and hide their tracks, making it difficult for law enforcement agencies to trace the source of the funds. As a result, money mules play a crucial role in various types of financial crimes, such as money laundering, fraud, and identity theft. It is widely recognized that money mules are unfortunately common in many parts of the world, especially in regions with high rates of unemployment and economic instability. Criminals often target vulnerable individuals, such as students or low-income earners, to act as money mules. The increasing use of digital payment platforms, online banking and social media has made it easier for criminals to recruit money mules from anywhere in the world, leading to a rise in the number of cases involving money mule activity. Hence, this article aims to examine whether money mules should be held liable for their activities participating in money laundering schemes. In order to reveal the essence of money mule liability problem, the first part of this paper is dedicated to analysing the very concept of the money mule phenomenon and its connections with other branches of law, prevalence, prevailing ideas, and a typical portrait of the “money mule”. The second part of this paper analyses the existing approaches to the money mule phenomenon. One group of legal scholars is of the opinion that money mules are in most cases accomplices of criminal acts, and they base their position on statistical data that money mules, having realized their illegal actions, continue them, or even start recruiting new money mules themselves. Meanwhile, other legal academics take the position that money mules themselves are victims of organized crime, and accordingly raise questions about the greater role of financial institutions in monitoring banking operations as well as responsibilities. Hence, as law academics derive the responsibility of money mules from the perception of the illegality of their actions, this work reveals in detail the ambiguous attitude of law academics to the phenomenon of money mules and the possibilities of legal liability. As a result, the main question arises -are the money mules are accomplices of the crime, or whether they are simply just a tool for exercising the crime? The third part of this work is dedicated to analysing the possibilities of civil liability of money mules unaware of their illegal actions and the specifics of proof when applying the general tort rule. This paper analyses briefly whether aspects such as allowing another person to use one’s bank account without the bank’s knowledge, agreeing to withdraw money for a reward (or other motive), seeking to help the person who requested help due to certain alleged constraints (bank account blocking or bailiffs) do not violate the general nature duties of care and caution. Finally, it is analysed whether the money mule, although not knowing about the criminal origin of the money, but not taking any steps to verify the legality of such a transfer and not being interested in the origin of such funds, contributes to causing harm to the victim. Considering the fact that in Lithuanian legal literature the issues of money mule liability have not yet been thoroughly analysed, and there are isolated cases of the phenomenon of money mules in the practice of Lithuanian courts, it can be assumed that the systematization of court practice, the analysis of relevant legal acts and the conclusions obtained in this work can be extremely significant when deciding the issue of liability of money mules in Lithuania.

PurposeThis paper aims to provide a systematic literature review (SLR) on contemporary cardinal money mule issues.Design/methodology/approachThis paper reviews the most common money mule themes in perpetrating financial crime activities, especially its roles, recruitment and awareness. A systematic review protocol called preferred reporting items for systematic review and meta-analysis protocols is adopted for this study.FindingsMoney mules are used by organized criminal groups (OCG) or fraudster to launder illicit funds from outrageous criminal activities. They allow their accounts to be used for money laundering by OCG. The attacker, OCG or fraudsters would layer the stolen funds using money mule accounts. These money mules are recruited using various approaches, oftentimes deceived by opulent lifestyles to captivate the interest of potential money mules.Originality/valueThis paper presents money mule awareness needed by accountant, bank employees and the society. It is an unprecedented SLR on money mule. This paper will be beneficial for future money mule researchers, enforcement agencies and practitioners in banking industry.

IntroductionMoney mules can be seen as a crucial part of the criminal network. They are of great importance for the core members of these networks because money mules are used to interrupt the trail that may lead law enforcement agencies to the top of the network. Money mules, for example, register bank accounts or businesses under their names, which are actually exploited by the criminal network.Several studies acknowledge the important role of money mules in the diversion of money stolen by cyber criminals who are engaged in financial cyber crimes, such as carding3 or phishing4 attacks (Choo, 2008; Moore & Clayton, 2009; McCombie, 2011;Aston et al., 2009; Soudijn & Zegers, 2012; Leukfeldt, 2014; Leukfeldt et al., 2016b, 2016c). Most of these studies, however, concentrate primarily on the core group of the criminal networks and only focus indirectly on money mules. Empirical studies into characteristics of internet money mules are lacking. Only Aston et al. and McCombie carried out some exploratory analyses of money mules used in Australian phishing attacks.In order to fill this knowledge gap, this paper focuses on money mules who are used by cyber criminal groups that carry out attacks on financial institutions. To gain insight into this group of criminals, which we believe plays a vital role in the crime process; we analyzed unique data from a fraud registration system of a major Dutch bank. We obtained 600 fraud incidents from the period 2011-2013. Based on these data, this paper provides insight into the characteristics of money mules and the way in which this group is used by criminal networks to transfer money from victim bank accounts. More specifically, we present background characteristics, the socioeconomic status of money mules, and the value and number of transactions to money mules.Review of LiteratureThe present study advances the work of Leukfeldt et al. (2016a, 2016b, 2016c). These studies provide insight into the composition, origin and growth, and criminal capabilities of criminal networks carrying out financial cyber crimes. Forty cyber criminal networks were analyzed in the Netherlands, Germany, UK and the US. The Dutch cases provided the authors with information about cyber criminal networks and their members largely as a result of investigative methods such as wiretaps, IP taps, observations, undercover policing and house searches. The authors reviewed the financial cyber crime cases systematically using an analytical framework. In the other three countries, the authors relied on interviews with case officers and public prosecutors involved in the criminal investigations against cyber criminal networks since no police files were available to them. This section briefly describes the main results of these three studies.Criminal CapabilitiesAll networks that were analyzed by Leukfeldt et al. are involved in attacks on online banking. The crime scripts of the Dutch networks have many similarities. Step one is obtaining login credentials from victims. Cyber criminals use phishing e-mails, phishing websites and malware to intercept these credentials. However, in order to transfer money from the account of the victims, so-called 'one-time transaction authentication codes' are needed. Hence, step two is obtaining these codes. Various methods are used to obtain these codes. In some cases, the criminals posed as bank employees and made telephone calls to the victims. In other cases, malware adapted the transaction that victims made without them knowing or being able to see it. Step three is related to the topic of the present study, i.e., transferring money to money mule accounts. Money from victims' accounts is not transferred to the accounts of core members directly. Rather, in order to obscure the trail to the core members, money mule bank accounts are used.5 Once money is transferred to the money mule account, the money is taken out in cash as fast as possible and via various links given to the core members. …

Purpose This paper aims to help build awareness with financial institutions about the money laundering risks posed by individuals who have been unknowingly recruited as Money Mules and the measures that financial institutions can adopt to detect illicit funds which are being received into the bank accounts of low risk or medium risk customers who are unknowingly recruited as “Money Mules”. Design/methodology/approach The research took the form of a desk study, which analysed various documents and reports such as a 2019 report on Money Mules by the European Union Agency for Law Enforcement Cooperation (EUROPOL); a 2019 and 2020 report on Money Mules by the Federal Bureau of Investigation (FBI) and the Better Business Bureau (BBB); the Financial Action Task Force Guidance on the Risk Based Approach to Combating Money Laundering and Terrorist Financing (High Level Principles and Procedures) 2007; the Financial Action Task Force Recommendations 2012; the United Kingdom’s Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017; the United States Federal Financial Institutions Examination Council Bank Secrecy Act/Anti-Money Laundering Examination Manual 2014; Transparency International Corruption Perceptions Index 2018; The UK Proceeds of Crime Act 2002 (as amended); the Joint Money Laundering Steering Group JMLSG, Prevention of money laundering/combating terrorist financing: Guidance for the UK financial sector Part I June 2017 (Amended December 2017); the United States Codified Bank Secrecy Act Regulations (31 CFR); the Nigerian Money Laundering Prohibition Act 2011 (as amended); and the Joint Money Laundering Steering Group JMLSG, Prevention of money laundering/combating terrorist financing: Guidance for the UK financial sector Part II: Sectoral Guidance June 2017 (Amended December 2017). Findings This paper determined that financial institutions may be able to prevent proceeds of crime from being laundered by individuals who have been unknowingly recruited as Money Mules if they focus monitoring resources on the emotionally vulnerable customers like newcomers to the country, unemployed people who may have lost their jobs because of a pandemic like COVID-19, students and those in economic hardship; pay very close attention to the country of origin where the funds emanate from; pay very close attention to the country where the funds are being transferred to; and pay close attention to frequent large cash deposits followed by wire transfers. Originality/value While most articles focus on the money laundering risk(s) associated with Money Mules and the measures that individuals can use to ensure that their bank accounts are not used by criminals to launder illicit funds, this paper focuses on the different mechanisms that banks can use to detect illicit funds which are being received into the bank accounts of low risk or medium risk customers who are unknowingly recruited as “Money Mules”. This paper recommends a proportional approach that balances anti-money laundering measures, financial inclusion and human rights. The mechanisms/measures which have been extensively discussed in this paper will help banks to identify, assess and understand their money laundering and terrorist financing risks as it relates to Money Mules and take commensurate measures to mitigate them.

Purpose: This paper aims to help build awareness with financial institutions about the money laundering risks posed by individuals who have been unknowingly recruited as money rules and the measures that financial institutions can adopt to detect illicit funds which are being received into the bank accounts of low risk or medium risk customers who are unknowingly recruited as “Money Mules. Design/Methodology/Approach: The research took the form of a desk study, which analyzed various documents and reports such as a 2019 report on Money Mules by the European Union Agency for Law Enforcement Cooperation (EUROPOL); a 2019 report on Money Mules by the Federal Bureau of Investigation (FBI) and the Better Business Bureau (BBB); the Financial Action Task Force Guidance on the Risk Based Approach to Combating Money Laundering and Terrorist Financing (High Level Principles and Procedures) 2007; the Financial Action Task Force Recommendations 2012; the United Kingdom’s Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017; the United States Federal Financial Institutions Examination Council Bank Secrecy Act/Anti-Money Laundering Examination Manual 2014; Transparency International Corruption Perceptions Index 2018; The UK Proceeds of Crime Act 2002 (as amended); the Joint Money Laundering Steering Group JMLSG, Prevention of money laundering/combating terrorist financing: Guidance for the UK financial sector Part I June 2017 (Amended December 2017); the United States Codified Bank Secrecy Act Regulations (31 CFR); the Nigerian Money Laundering Prohibition Act 2011 (as amended); and the Joint Money Laundering Steering Group JMLSG, Prevention of money laundering/combating terrorist financing: Guidance for the UK financial sector Part II: Sectoral Guidance June 2017 (Amended December 2017). Findings: This paper determined that financial institutions may be able to prevent proceeds of crime from being laundered by individuals who have been unknowingly recruited as Money Mules if they focus monitoring resources on clients who are more likely to be used as Money Mules by criminal networks and organizations; Pay very close attention to the country of origin where the funds emanate from; Pay very close attention to the country where the funds are being transferred to; Pay close attention to Frequent Large Cash Deposits Followed by Wire Transfers; and Pay close attention to customers who make use of the wealth management services of the bank. Originality/Value: While most Articles focus on the money laundering risk(s) associated with Money Mules and the measures that individuals can employ to ensure that their bank accounts are not used by criminals to launder illicit funds, this paper focuses on the different mechanisms that banks can employ to detect illicit funds which are being received into the bank accounts of low risk or medium risk customers who are unknowingly recruited as “Money Mules. This paper recommends a proportional approach that balances anti-money laundering measures, financial inclusion and human rights. The mechanisms/measures which have been extensively discussed in this paper will help banks to identify, assess and understand their money laundering and terrorist financing risks as it relates to Money Mules and take commensurate measures in order to mitigate them.

PURPOSE – This paper aims to help build awareness with financial institutions about the money laundering risks posed by individuals who have been unknowingly recruited as money rules and the measures that financial institutions can adopt to detect illicit funds which are being received into the bank accounts of low risk or medium risk customers who are unknowingly recruited as “Money Mules. DESIGN/METHODOLOGY/APPROACH – This paper relies mainly on primary and secondary data drawn from the public domain. It also relies on documentary research.FINDINGS – This paper determined that financial institutions may be able to prevent proceeds of crime from being laundered by individuals who have been unknowingly recruited as Money Mules if they focus monitoring resources on clients who are more likely to be used as Money Mules by criminal networks and organizations; Pay very close attention to the country of origin where the funds emanate from; Pay very close attention to the country where the funds are being transferred to; and Pay close attention to customers who make use of the wealth management services of the bank.ORIGINALITY/VALUE – While most Articles focus on the money laundering risk(s) associated with Money Mules and the measures that individuals can employ to ensure that their bank accounts are not used by criminals to launder illicit funds, this paper focuses on the different mechanisms that banks can employ to detect illicit funds which are being received into the bank accounts of low risk or medium risk customers who are unknowingly recruited as “Money Mules.

Money mule phenomenon is a global threat that inflicts the financial system. It is one of money laundering concerns affecting the banking institutions and require enigmatic compliance effort. Criminals such as fraudsters, scammers and cyber attackers use money mules to launder their ill-gotten proceeds. The principal aim of engaging money mule is to hide the money trail and thus stymie any possible effort to investigate the underlying criminal activity. The proceed of fraud or scam is rarely directed to the criminal’s account. Therefore, it is vital for bank’s financial crime compliance officers to be able to perform money mule risk assessment when conducting money mule case investigation. The assessment begins with risk identification from Know Your Customer (KYC) information and transaction monitoring. The output from the money mule risk assessment would be useful in building up Suspicious Transaction Report (STR). This article introduces the concept of money mule risk assessment which would be beneficial to academicians and anti-money laundering practitioners.

Money laundering is perceived as a global threat with funds sourced from illegal and fraudulent activities. Money mules are recruited by criminal networks in money laundering chain, positioned between actual criminal and the illicit funds, enabling the criminals to be anonymous and non-visible to the detection of law enforcement. Job vacancy with various positions are offered with attractive financial rewards and work flexibility and the criminal elements are hidden behind the job criteria. Awareness on job criteria and the hidden criminal elements is a crucial factor in job acceptance.  This study examines recruitment anatomy of students as money mules and job acceptance decisioning from awareness perspective.  Library research methodology was employed in this research by reviewing existing research works on money mule recruitment to identify the underlying reasons and lapses in money mule recruitment and statistical analysis on the reported money mule cases.  Based on the examination, students are captivated to attractive job packages and accept the offer without being aware of the criminal activity at the background and directly expose them to enforcement actions. Incrementing statistics sets the scene of scarcity in the perspective of awareness on job criteria among students and crucial for students to assess and consciously decide on the acceptance and avoid victimized by the criminal networks.

The inspiring digital innovation has gained traction from criminals who have perfected their modus operandi in targeting victims with cybercrimes and fraudulent activities with the financial motive being the common denominator. The money trail had been the evidence of the crime, as such the illicit funds enter a money-laundering scheme to disguise the money trail from the unlawful activities and transform the funds into legitimate sources. Criminals recruit money mules and position them in the money laundering cycle to transfer funds that have been credited into their bank accounts. Criminals strategize recruitment by promoting job packages with persuasive job vacancy advertisements and attractive rewards. The hidden criminal agenda has been blurred in the decision making and job acceptance process by the rewards offered. This study will explore the underlying psychological aspect which relates to rewards and job acceptance using the theory of heuristics, social influence, and individual differences. Based on the examination, victims were captivated by attractive rewards and scrutinizing the job package became less attentive in deciding the job acceptance.

This study explores the influence of socio-demographic characteristics on money mule recruitment types in South Korea. Analyzing data from 543 apprehended money mules, probabilities were calculated for each group’s involvement in recruitment types. Using class membership probability estimates from six machine learning methods, the research investigates the probability relationship between socio-demographic characteristics and recruitment types. Findings indicate that unemployed individuals in their 20s with intermediate education levels are more likely to be recruited through social media, while offline recruitment is prevalent among unemployed teenagers with low education levels and men over 50s with criminal records. Highly educated unemployed individuals in their 20s and 30s show a higher probability of using online job search channels. The study provides valuable insights into the complex interplay between sociodemographic factors and money mule recruitment, offering potential implications for law enforcement agencies in developing effective crime prevention strategies. Further analysis will shed light on the underlying reasons behind these results.

Application of Money Flow Analysis Technology in the Investigation of Money Laundering Crimes in Taiwan

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This article discusses the roles played by the enforcement agency, the current money mule situation, and the challenges faced by enforcement agency investigation officers in money mule investigations. An interview with informant from one of the Malaysian Enforcement Department, was conducted to gather his insights. An enforcement officer launches a money mule investigation based on the victim’s police report or Suspicious Transaction Report (STR). Investigation into money mule cases received by law enforcement agency is guided by Penal Code 424 and AMLATFPUAA 2001, which clearly expound the offence implicated in the money mule syndicate. The output from the interview is analysed under content analysis, whereupon the large amount of extracted information is summarised and arranged into important themes that address the research objective. The major challenges faced in criminal investigation include lack of cooperation from telco, delayed response from banks when requested to provide crucial information, wrong public perceptions on enforcement agency’s aggressiveness to fight money mule, lengthy investigation procedure, limited resources and lackadaisical attitude towards money mule threat. The challenges undermine the fight to eradicate the money mule phenomenon, one of the most critical financial crime threats in Malaysia. A slew of changes that enforcement agency is keen to see are proposed, including a more proactive telco regulator, a shorter processing period by banks in responding to production orders from enforcement agencies, and a steeper involvement by the media to build public awareness.

Financial crises are repeatedly creating waves in modern economic history that have generated massive disruptions in financial markets and real economy. Crises are typically triggered by structural misalignments, high levels of leverage and regulatory failures that trigger credit crunches, losses in investor confidence and system instability. The U.S. banking industry plays a pivotal role in financial intermediation and is one of the most vulnerable sectors. The performance of banks has significant implications for the overall stability of the economy. Keeping these in view, this paper examines the impact of financial crises on the U.S. banking industry and suggests possible strategies to improve resilience. The paper examines impact of crises on financial system as whole, internal development of banks and consumers’ access as well as confidence in banks before suggesting three broad sets of counter strategies. The findings of this paper suggest that financial crises impact the banking industry by crunching credit, losses in asset quality, impact on profitability and massive losses in consumers’ confidence towards banking institutions. To mitigate these impacts, this paper suggests three broad sets of strategies that include improving regulatory oversight and risk management, encouraging innovation in banking services and improving consumers’ protection along with financial education. The findings of this paper are theoretical as well as practical. The findings of this paper contribute to the literature on systemic financial risk, it adds to the academic discourse and provides valuable insights for policy makers, regulators and industry practitioners who are interested in shaping a resilient and more trusted banking industry.

Understanding help-seeking among victims of elder abuse is a critical challenge in the field. The vast majority of elder abuse victims remain hidden from formal support/protective response systems, such as adult protective services, legal/justice, law enforcement, or other agencies responsible for addressing this issue in the community. Guided by the Behavioral Model of Health Services Use, this study examined factors that facilitate or impede formal help-seeking among victims of elder emotional, physical and sexual abuse, represented by a call for help in the form of a report to police or other authorities. Data came from a national, population-based elder abuse study in the U.S. with a representative sample (n=304) of victims reporting abuse in the past year. Gold-standard measurement strategies were used to assess each elder abuse subtype. Multivariable logistic regression was conducted to identify help-seeking facilitators/barriers. Help-seeking through reporting to police or other authorities occurred among only 15.4% of elder abuse victims nationwide. Help-seeking was predicted by factors attached to the victim (abuse type, poly-victimization), perpetrator (prior police trouble, social network size), and victim-perpetrator relationship (victim dependence on perpetrator). This study highlights the extremely hidden nature of elder abuse in our society, as well as the need to develop strategies that incorporate victim, perpetrator, and victim-perpetrator relationship factors to promote greater help-seeking among victims.