What are the red flags that a customer is acting as a money mule?
Look for customers who move money on behalf of someone else: pass-through activity, or a new account opened for an unexplained job or "business". No single indicator proves a customer is a mule.
What the guidance says: • A money mule is a person who transfers illegally acquired money on behalf of or at the direction of another. Mules may be unwitting, witting or complicit (FIN-2020-A003). • In work-from-home schemes, the target is told to move funds through accounts or to set up a new account in their own name for the "business", and keeps a percentage of the funds transferred. Other recruitment examples are good-Samaritan and romance schemes (FIN-2020-A003). • General red flags written for banks and examiners include many small incoming transfers or deposits that are almost immediately wired to another city or country in a manner inconsistent with the customer's business or history; funds transfers sent or received from the same person to or from different accounts; and large deposits and withdrawals shortly after opening, followed by closure or dormancy (FFIEC BSA/AML Examination Manual, Appendix F). These are not mule-specific, and a red flag alone is not evidence of criminal activity but may warrant closer scrutiny.
What we would look at: • Compare the activity with the customer's historical activity and with prevailing business practices, and note whether several indicators appear together (FIN-2020-A003). • Make additional inquiries where appropriate, for example how the customer came to be moving the funds.
When it becomes a SAR question: If you file on activity tied to this advisory, FinCEN requests the key term "COVID19 MM FIN-2020-A003" in SAR field 2 and the narrative, and SAR field 34(z) (Fraud - other), naming the type of fraud, such as money mule scheme (FIN-2020-A003).
For the advisory's own list of money mule indicators, check the full text of FIN-2020-A003.
Sources
- FinCEN FIN-2020-A003: https://www.fincen.gov/sites/default/files/advisory/2020-07-07/Advisory_%20Imposter_and_Money_Mule_COVID_19_508_FINAL.pdf
- FFIEC BSA/AML Examination Manual, Appendix F (red flags): https://bsaaml.ffiec.gov/manual/Appendices/07
This answer is general information, not legal advice. Forteris is not a law firm.
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