There is a plethora of scams afoot in the current fraud landscape, each more disturbing and invasive than the last. Looking at financial crime trends emerging this year, money mules have become somewhat of a buzzword, so this article serves as an overview
of money mules.
Money mules are criminals who transfer stolen funds on behalf of other people. Also referred to as ‘smurfers’ or ‘squaring’, money mules transfer money in person, through a courier, or online illegally – having acquired the funds through theft or fraud.
This is a form of money laundering that has been active for decades, but is seeing new growth now with fresh technology.
Those controlling the money mules, referred to as ‘herders’ or ‘recruiters’ often attempt to shroud themselves in mystery under false identity to protect their networks and remain anonymous to law enforcement.
The money laundered by money mules has been linked to a variety of crimes, from account takeovers, investment and romance scams, drug trafficking, human trafficking, and terror financing.
Money mules multiplying to money packs
According to a report from
BioCatch, money laundering cases increased from 14% between 2019 and 2023, and there were almost two million money mule accounts reported in 2024. While banking security is on the rise, it is deceptively easy to open a new company in the UK and opening
multiple bank accounts. According to the
UK government, £10 billion of illicit funds are laundered each year.
90% of money mule accounts in the EU are linked to cybercrime.
New ways in which money is being moved around illicitly is through multiple bank accounts and cryptocurrency schemes. In the US, social media and messaging is how money mules are most commonly recruited, with payment services like Zelle, Interac, and ACH
used to transfer payments. Financial institutions in Europe are seeing falsified business portfolios being used for money laundering of high value transactions.
In Australia, there have been an increased number of cases of money laundering linked to electronic gaming machines and online gambling.
Some money mules are unaware that they are involved in criminal activity. People can sometimes accidentally become money mules, sometimes believing they are being hired by legitimate employers while in reality are being duped into transferring funds illegally.
Criminals often
target the vulnerable, using advertisements on social media for ‘easy money’ and ‘quick cash’ to loop people into moving money on their behalf. In North America, it is most common for people from the ages of 25-35 to be lured by a money mule hustle. There
have been cases of money mule herders
targeting students studying abroad in the UK.
BioCatch found that 65% of money mules in the UK are under 30.
Regulations and guidance
In Europe and the UK,
Payments System Regulator (PSR) and
third Payments Systems Directive (PSD3) have legislation in place for banks to detect scams. The UK has
anti-money laundering regulations (AML) in place, and the EU adopted the AML ad countering the financing of terrorism legislation in 2021 to
combat money laundering.
To avoid being tricked into participating in money mule schemes, regulators advise that you be wary of people you meet on social media, especially if they ask for money or bank details, and to be aware of ‘easy money’ schemes.
The penalties for money mules are quite severe, with perpetrators facing up to fourteen years in prison in the UK, over five years in the US, and twelve months to live in Australia. Those who are accused of willingly being involved in money mule schemes
could face closure of their banks accounts, denial of loans and credit, issues in future job opportunities, and dismissal from professional bodies.