Source-This post on Money Mule has been created based on the article “Banks scanning proprietor A/Cs to spot ‘money mules” published in “Economic Times” on 5 July 2024.
Why in the news?
Recently, many major banks have stopped or slowed down the process of opening sole proprietorship and individual current accounts for firms that are less than a year old.
This is due to the suspicion that these firms could be involved in money laundering and digital frauds, acting as ‘money mules.’
About Money Mule
1. A money mule is a person who transfers or moves money that has been illegally acquired on behalf of someone else.
2. How Criminals Use Money Mules: Criminals recruit money mules to help them launder money gained from online scams, frauds, and other crimes such as human trafficking and drug trafficking.
3. Purpose: They create layers of separation between the victims of the crime and the criminals. This makes it more challenging for law enforcement to trace the money back to the original source.
4. Methods Used: They can move funds in various ways, including bank accounts, cashier’s checks, virtual currency, prepaid debit cards and money service businesses.
5. Recruitment of Money Mules: Criminals often use fake job advertisements or social media posts about quick money-making opportunities to recruit potential money mules.
6. Some of them are aware they are supporting criminal activities, while others may not realize they are helping criminals’ profit.
7. They often receive a commission for their services or might assist because they believe they have a trusting relationship with the person asking for help.
8. When such frauds are reported, money mules become targets of police investigations. Even if they are not directly involved in the crimes that generate the money, they are considered accomplices because they help launder the proceeds of these crimes.
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