What is money laundering and how do you protect your assets?

Alexandra -

Money laundering is a problem that will not lose its relevance in 2022. Financial transactions involve "money mules". These are people who receive money from a third party into their own account and transfer it to another person or company. Transactions are usually done online. However, it is not uncommon for mules to withdraw the amount transferred and give the cash to a third party. Such a person usually receives a percentage of the transaction or a fixed fee for his services.

Most often mules work with illegal funds. Their services are used by criminals to "launder" the money they have earned through fraud in areas such as:

  • prostitution;
  • human trafficking;
  • drug transactions.

The emergence of money mules makes it increasingly difficult for law enforcement agencies to identify potential fraudsters. In fact, another element appears in the criminal chain that makes it impossible to directly find the perpetrators.

How is mule recruitment going?

As various sites that offer vacancies on the Internet develop, the number of mules is increasing rapidly. Quite often people write about such jobs almost openly. For example, offering to become a "money transfer agent".

In addition to sites with vacancies such ads can be seen:

  1. On e-mail. They are often placed in the "Spam" folder, so many people simply don't pay attention to them. Such emails look harmless, but you should never click on the links they contain.
  2. In social networks. Scammers are especially active on Instagram and Facebook. On these platforms, they create special pages or groups, in which they try to promote their activity, veiledly talking about the activity of this or that company.
  3. In pop-ups. On dubious sites, information about vacancies, and benefits for potential mules is placed.

In their ads, scammers most often focus on those who have no stable source of income, students, and vulnerable categories of citizens. Statistics show that people under 35 are most often involved in illegal financial transactions. Moreover, now the possibilities of malefactors have widened and they focus on the young audience (18-22 years old).

In their ads, scammers usually state that they are representatives of a foreign company. The specific area of activity is not named, but instead, something vague is stated. For example, they are involved in entertainment or trade. The position almost never specifies requirements for the place of experience and qualifications. In fact, potential mules are offered a high income without much effort. If you see an ad like this, it's a reason to be wary.

It is important for potential victims to understand that even if their activities are not related to what is considered a crime (drugs, human trafficking, cybercrime), they are accomplices to offenses. Money laundering is a criminal offense. Most importantly, mule services are what keep criminal syndicates operating, and remain elusive to the police.

What are the methods of operation?

Nowadays, especially with the development of cryptocurrencies, the money laundering procedure is becoming more and more "sophisticated." Therefore, it is difficult for law enforcement officials to prove the involvement of certain criminal elements in financial flows. Mules can use:

  • bank accounts;
  • checks;
  • digital assets.

Another big problem is that many participants in shady schemes do not even suspect that they are working with criminals and can be punished.

Using a third-party account allows criminals to "whitewash" their funds. But law enforcement can easily get to the mule. Therefore, there is no need to participate in dubious schemes or respond to phishing emails.

What are the consequences?

Even if you do not realize that you are breaking the law, it does not help you to avoid responsibility. The degree of punishment depends on the amounts transferred and the length of your cooperation. Often mules get a real prison sentence. The crime of money laundering and identity theft is a serious offense that is often accompanied by aggravating circumstances.

Another problem is getting mule data into the hands of fraudsters. Later, the criminals can use these accounts for illegal operations. And it is their owner who is brought to justice.

The next risk for the mule is a blow to his credit history and solvency. Banks will probably not want to deal with someone who has been accused of fraud.

What are the main signs of "mulling"?

Some of the basic tricks that scammers use have been mentioned before. Other typical tricks include:

  1. Promising easy money without serious effort.
  2. Conducting communication exclusively online. Yahoo, Hotmail, Outlook and other platforms can be used for this purpose.
  3. An offer to open a bank account to receive a transfer. To many people, this may seem like a standard request. However, you should be especially careful if your "employer" asks you to process and transfer that money or a portion of it to another account.
  4. Your responsibilities and role in the company are not specifically described.

All these are reasons to refuse to cooperate with such a company.

Basic principles of protection against mulling

At first, it is important to recognize the trick and not to agree to work with scammers. To do this, you can take a few simple steps. For example:

  1. Find out more about the company on the Internet. Information on its website and reviews are usually enough to understand how safe, responsible, and legal the brand is.
  2. Check out the source of income. Organizations that operate legally do not hide exactly what services they provide. They're okay with reporting, and even when you ask them directly about receiving funds, you probably will get a real answer.
  3. Use "Know Your Business" (KYB). Thanks to it, you can find out how legitimate the activity of a particular brand is. The experts will help to find out how legal the company is. KYB is not just a verification. Thanks to this procedure it becomes clear whether your partner can be trusted.
  4. KYC. You must know your client, the person from whom you receive money, and the person to whom you will make the transfer. This is the key to making sure that all transactions are controlled and secure. Working legally will prevent you from incurring costs and falling into the hands of scammers.

Follow these simple steps and your online safety will be protected. Never give any information about your bank card or especially its PIN code, and CVV number to any suspicious companies, organizations, or their representatives.

General conclusions and recommendations

Police statistics show that the main flows of money mules are now related to cybercrime. Unscrupulous companies are involved in Internet fraud, online auctions, and software attacks. Try not to click on dubious links, and do not give your data to anyone, even if they promise a good reward.

KYC methods will allow you to learn more about your potential partner. If you realize that you have encountered scammers, report it to law enforcement. Do not become an intermediary for a criminal association. Otherwise, the perpetrators will be able to continue their activities and you will be prosecuted.

So, working with verified firms is the best guarantee of personal data security. Professionals will help to find out information about the activities of different organizations. In addition, modern brands that operate legally try to be as open as possible. They have active social networks and a website. It is enough to study the information presented on such sites to make a decision concerning the expediency of cooperation. There is no need to agree to dubious operations, which can turn out to be unprofitable and risky for your business. A preliminary analysis of clients is what will allow you to protect yourself from mistakes.