“Money mules”: grounds, conditions and form of civil liability

Abstract

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.