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State of Financial Crime 2023 Report

Over 2,000 Money Mules Arrested in International Europol Probe

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On December 5, 2022, Europol announced the arrest of 2,469 money mules in its eighth edition of the European Money Mule Action (EMMA8). Supported by Eurojust, INTERPOL, and the European Banking Federation (EBF), the latest operational phase began in September and ran until November. 

In addition to the arrests, 8,755 money mules and 222 money mule recruiters were identified worldwide. The operation also uncovered 4,089 fraudulent transactions, which led to the interception of €17.5 million.

Beginning in 2016, the EMMA initiative is the largest international operation of its kind, involving 25 countries, including the UK, Ireland, Italy, Spain, the US, and Australia. Public-private information sharing forms the bedrock of the initiative, with around 1,800 banks, cryptocurrency exchanges, FinTechs, and know-your-customer (KYC) companies supporting law enforcement. 

The Scale of Money Mule Activity

According to the UK fraud prevention service, Cifas, the number of people under 21 bearing the hallmarks of money mule activity is increasing by 78% year-on-year.INTERPOL says individuals are often recruited via online scams that promise financial gain. Some common scams include:

  • Job scams
  • Romance scams
  • Debt relief scams
  • Investment scams
  • Refund scams
  • Impersonation scams

Europol’s investigation is the most recent in a long line of probes into money mules. In 2021, Europol, INTERPOL, and the EBF identified over 18,000 money mules, leading to the arrest of 1,803 people involved in criminal activities valued at a collective €67.5 million.

In July 2022, the National Crime Agency (NCA) reported the imprisonment of a money laundering group ringleader who arranged a network of cash couriers to smuggle £104 million from the UK to Dubai between November 2019 and October 2020. Described as “one of the largest [money muling cases] ever investigated” by the NCA, wads of bank notes were found vacuum packed and separated into suitcases that each contained around £500,000 and weighed around 40kg. It was also discovered that each bag had been sprayed with air fresheners or coffee to prevent them from being found by Border Force detection animals.

Money Mule “Red Flag” Behaviors

To aid the detection and prevention of money muling activity, compliance staff should ensure they are familiar with the following red flag behaviors that may indicate suspicious activity:

  • Transaction patterns – Money mules are likely to engage in multiple transactions that do not fit their customer risk profile. To spot suspicious transaction patterns, firms should implement monitoring protocols that capture transaction characteristics and the surrounding context, including destinations and recipients. 
  • Unusual payment methods – To move money quickly and anonymously, money mules often use unique payment methods, such as prepaid cards or wire transfers
  • Transfer origin and destination – Money laundering schemes often involve transfers to and from higher-risk jurisdictions with very low scores from international watchdogs such as Transparency International. Therefore, financial institutions should pay close attention to the origin and destination of transactions involving potential money mule accounts, taking note of jurisdictions with especially weak AML systems and controls.
  • Unusual customer information – Money mules often use false or incomplete customer information to facilitate their transactions. If a customer provides suspicious or incomplete information, firms should investigate further and, when appropriate, employ enhanced due diligence (EDD) measures. 
  • Shell companies – Shell companies are often created by money mules to hide the beneficial ownership structures that underpin money laundering networks. Criminals then use shell company accounts to route illicit funds to and from multiple locations. 

Financial institutions must be vigilant in identifying and reporting suspicious activities and transactions to prevent and detect money mules. 

Key Takeaways

To mitigate the risk of money laundering through money mules, compliance teams should ensure their know-your-customer (KYC) policies require customers to provide detailed documentation of their identity and financial history. Customer profiles should also be regularly reviewed and updated to ensure that all information is accurate and up-to-date. In light of a firm’s risk assessment and determined risk appetite, transaction monitoring systems should also be calibrated to identify the risk indicators of money mules listed above. 

Finally, firms may consider exploring and assessing their information-sharing protocols to help fight complex modern crimes. Compliance teams looking to enhance their information exchange procedures should consider the Financial Action Task Force’s (FATF) report on Data Protection, Technology, and Private Sector Information Sharing.

Originally published 08 December 2022, updated 09 December 2022

Disclaimer: This is for general information only. The information presented does not constitute legal advice. ComplyAdvantage accepts no responsibility for any information contained herein and disclaims and excludes any liability in respect of the contents or for action taken based on this information.

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