Australia helps EU in latest crack down on money mules

  • Liam Tung (CSO Online)
  • 29 November, 2017 05:16

Europol, a European cross-border police organization, has announced the arrest of 159 people who are accused of moving stolen funds on behalf of crime gangs. 

Money mules are mostly innocent victims in larger money laundering and crime schemes, but they're also a key link to cashing out stolen funds and are almost solely used for transactions that began with phishing and other cybercrime activities, according to Europol.   

The arrests are the result of the third round of the European Money Mule Action (EMMA) initiative, dubbed ‘EMMA3’, which took place between 20-24 November. EMMA2 wrapped up in mid-November with 178 arrests, while 81 people were arrested in the first EMMA action in 2016.  

Australian law enforcement, the FBI, and US Secret Service were the only non-European organizations to support EMMA3, which was backed by law enforcement from 26 nations, 257 banks and private sector firms, and the European Banking Federation. 

A further 409 people we're interviewed in the campaign, which helped identify 766 money mules. 

The crackdown identified 1,719 money mule transactions, representing losses of almost €31 million. According to Europol, over 90 percent of the transactions could be traced back to cybercrime activities, including phishing, online auction fraud, and a highly targeted form of phishing known as business email compromise (BEC) fraud. 

The EMMA campaign for the first time also included reports of romance scams, which are typically one of the larger areas of online fraud affecting Australians, and holiday booking fraud. Australians lost $25 million to romance scams last year, according to the ACCC. BEC fraud is a growing threat to Australian organizations and official figures probably don't capture the full scope of the crime due to underreporting. 

Unsurprisingly, law enforcement reports reflected the increasing role of cryptocurrencies, such as Bitcoin, in the money laundering schemes. 

The focus on money mules aims to break a key link in the chain of cybercrime operations, which begin with online credential theft but require assistance to cash out stolen funds at ATMs or via other online money transfers, for example, via a mule’s personal bank account to a criminal's account. Europol notes that mules are often innocent victims reached through job ads that target the unemployed, students, and new migrants. 

On Monday, the UK’s chief fraud prevention service, Cifas, reported over 8,600 cases of 18 to 24 year olds using their bank accounts for money muling activities between January and September 2017. This represented a 75 percent rise compared to the same period in 2016. 

While mules can face criminal charges depending on the jurisdiction, Cifas highlighted other practical implications that can make life difficult for young people, such as having a bank account being closed and facing difficulties in getting mobile phone contracts, student loans and other financial products. 

Cifas and Financial Fraud Action UK launched an awareness campaign this week to remind young people that becoming a money mule involves them in money laundering, a more serious financial crime that banks are required to monitor through anti-money laundering (AML) laws often associated with combating terrorism financing.