The COVID-19 pandemic has countless implications for everyone, regardless of where one lives in the world. In fact, one such consequence is the rise of criminal activities, such as money muling. During a short period which spanned from 15 September 2021 until 30 November 2021 only, Europol was able to identify 18,351 money mules and arrest 1,803 of these individuals. This is no trivial amount, and it creates concern that there are many more money muling schemes that have gone undetected.
However, what is money muling and how can we even recognize the signs of this heinous crime when it occurs? To delve even deeper in, how are we able to protect ourselves or our businesses from encountering money muling activities?
Basics of Money Muling
To put it simply, money muling is a subset of money laundering which takes place when money launderers hire other individuals to transfer funds that are illegally obtained. We refer to the individual recruited by the money launderer to carry out the task as a money mule. In this situation, the hired individual often has an impeccable record and has never been convicted of a crime, making it difficult for them to be detected on systems when transporting illicit funds. They are mostly recruited through social media or dating websites, and those who accept the job are usually from a vulnerable group in society, such as:
- Elderly Individuals: Those of age 40 and above are considered to belong to this category. In the UK, authorities have noticed a 34% increase in individuals from this age group performing money muling activities, when we compare data obtained from 2017 to 2020.
- The Youth: This includes minors, children, teenagers, and young adults. The UK has witnessed a 78% increase in cases of those under 21 years old performing money muling.
- Groups Facing Poverty or Financial Difficulties: Even before the Covid-19 pandemic, there were many facing financial difficulties who turned to illegal methods of making money to prevent falling into further stages of poverty or lack of wealth. However, since the pandemic began, there have certainly been an unaccounted amount of increases in this demographic performing money muling activities.
Alas, it does not matter whether the money mules were unknowingly committing the crime or purposefully ignoring the red flags of their task, and still going through with it. Severe consequences still apply to everyone who works as a money mule. Not to mention, the businesses that allow money mules to go undetected or operate could be implicated in the crime-solving process as well.
How can we Safeguard Against Money Muling?
Everyone would want to safeguard themselves from the repercussions of being convicted for facilitating money laundering crimes or from becoming a victim in the process. One time-consuming method would be to actively seek to recognize red flags and report them as soon as a customer’s activities appear suspicious. For example, this can be done by verifying against some indicators of money muling activity as identified through funds being moved by those who should not have such high amounts of assets, unexplainable origin sources of funds and multiple small transactions occurring repeatedly, among other factors.
RegTank’s Role in the Battle Against Money Muling
RegTank’s platform and services would enable your business to easily detect money muling activities. We obtain this through:
- Performing Screenings at the Onboarding Stage: RegTank offers Know-Your-Customer (KYC) and Digital Onboarding services for screening individuals. We’d be able to conduct a liveness test as part of the package for the latter. Through this, we can fully authenticate your customer’s identification, evaluate whether they are a risky customer to onboard, and determine whether they have previously engaged in money muling or may potentially do so in the future. Thus, you can elect to not onboard them, which protects your business from crime.
- On-going Monitoring: Following that, our ongoing monitoring function would automatically update you on the status of your client’s profile. This means that any criminal activity or suspected cases of such occurrence would be automatically made available to you upon obtaining the information. As such, you can easily terminate a contract with a client to prevent any further negative effects and losses.
- Transaction Monitoring: With transaction monitoring, suspicious or abnormal transactions can be detected in real-time. It conducts investigations into the origins and destinations of funds, as well as suspected links to money laundering. As a result, more money muling operations will be difficult to implement.
Nonetheless, there are other functions which we offer that could aid you in the fight against money muling. Contact us at info@regtank.com for a demo today!
