The Commodity Futures Trading Commission’s Office of Customer Education and Outreach (OCEO) has issued an advisory warning students and job seekers about the risks associated with "money mule" scams. These scams involve individuals transferring money into their bank accounts, digital wallets, or spot-market crypto trading accounts as part of their job duties or at the behest of others.
This warning is part of the CFTC's participation in the global Money Mule Initiative, an annual international effort to disrupt money laundering networks. The U.S. Department of Justice reported that during this year's campaign, actions were taken against more than 3,000 money mules, including criminal charges against 24 individuals.
"Young people looking for summer jobs may be just looking for part-time income and could be attracted to offers that require being online a few hours a day," said OCEO Director Melanie Devoe. "Unfortunately, they could become unwitting accomplices to money laundering or what the criminals call ‘money mules,’ and that association could land them in jail."
Criminal organizations often rely on networks of people to move illicit funds between bank accounts, currencies, and blockchains in an attempt to evade law enforcement. In some cases, these criminals involve people who may not realize they are participating in a criminal scheme.
The 2024 paper by University of Texas researchers John Griffin and Kevin Mei titled “How Do Crypto Flows Finance Slavery? The Economics of Pig Butchering,” states that relationship confidence frauds, also known as financial grooming frauds, rely on crypto-assets. An estimated $75 billion has moved through digital wallets connected to these frauds.
Law enforcement is improving its ability to trace and seize stolen assets on blockchains. As a result, criminals are motivated to convert their tokens into dollars and may recruit unwitting accomplices to do so. Victims of money mule scams may also be directed to convert cash into crypto using bitcoin kiosks or other methods, and then send the assets to different digital wallets.
Over the past year, the CFTC has brought charges in two cases that allegedly involved money mule activity. The OCEO is dedicated to helping customers protect themselves from fraud or violations of the Commodity Exchange Act through research and development of effective financial education materials and initiatives.
The CFTC advises individuals not to become unwitting money launderers. Criminal organizations are targeting students and people looking for easy stay-at-home income with online offers that involve setting up bank accounts, sending or receiving money, converting dollars to crypto-assets or vice versa, or receiving funds to buy merchandise and deliver it to a third party.
In reality, transnational criminal organizations use these recruits' unsuspicious accounts to make it harder for law enforcement to trace funds stolen through fraud or other serious crimes such as human trafficking or illegal drug sales. The criminals refer to these people as "money mules" — individuals who receive and move assets at someone else's direction. Law enforcement refers to this activity as money laundering, which could result in jail time if it continues unreported.
