The Commodity Futures Trading Commission’s Office of Customer Education and Outreach (OCEO) today issued a customer advisory warning students and other job seekers looking for remote work to be aware of the warning signs and dangers of “money mule” scams. Money mule scams involve individuals sending and receiving money into their bank accounts, digital wallets, or spot-market crypto trading accounts as part of their job duties or at the direction of others.
The warning comes as part of CFTC’s participation in the global Money Mule Initiative, an annual international effort to disrupt money laundering networks. During this year’s Money Mule Initiative campaign, the U.S. Department of Justice reported, agencies took actions 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 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, the criminals involve people who may not realize they are participating in a criminal scheme. They may think they’re helping a friend, doing a favor for a love interest, or performing job duties. However, the consequences – often in the form of criminal charges – remain the same for witting and unwitting participants.
The 2024 paper by University of Texas researchers John Griffin and Kevin Mei, “How Do Crypto Flows Finance Slavery? The Economics of Pig Butchering,” states 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, the study said. Law enforcement is getting better at tracing and seizing stolen assets on blockchains, so criminals are motivated to “off-ramp” or convert their tokens to dollars, and may recruit unwitting accomplices to do so.
Money mule scam victims may also be directed to “on-ramp” cash to a blockchain by converting cash to crypto using bitcoin kiosks or other methods, and then sending the assets to different digital wallets. Another common practice is “smurfing” or receiving a large crypto-asset payment to a digital wallet and then sending smaller amounts to a list of other digital wallets. Money mules are commonly paid by keeping a portion of the ill-gotten gains they received.
Over the past year, the CFTC brought charges in two cases that allegedly involved money mule activity. [See CFTC Press Release Nos. 8850-24 and 8841-23]
About the Office of Customer Education and Outreach (OCEO)
OCEO is dedicated to helping customers protect themselves from fraud or violations of the Commodity Exchange Act through the research and development of effective financial education materials and initiatives. OCEO engages in outreach and education to retail investors. The office also frequently partners with federal and state regulators as well as consumer protection groups. The CFTC’s full repository of customer education materials can be found at: https://www.cftc.gov/LearnAndProtect.
Customer Advisory: Don’t Become an Unwitting Money Launderer is available in full below and on CFTC.gov.
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Criminal organizations are targeting students and people looking for easy stay-at-home income. The online offers say all you have to do is set up bank accounts, send or receive money, convert dollars to crypto-assets or vice-versa, or receive funds to buy merchandise and deliver the goods to a third-party. For your time and trouble, you get to keep some of the money you receive.
In reality, transnational criminal organizations use the recruits’ unsuspicious accounts to make it harder for law enforcement to trace the funds the criminals have stolen through fraud or other serious crimes such as human trafficking or illegal drug sales. The criminals call them “money mules” — people who, at someone else’s direction, receive and move assets. Law enforcement calls it money laundering, and it could land you in jail if it continues unreported. Your identity could also be reused by the criminals.
Besides job seekers who may believe offers to be “secret shoppers” or “payment processors” are legitimate, other people may think they are helping a friend through an urgent or difficult situation, but may actually be victims of a romance or friendship confidence scam. Relationship confidence scams, which the criminals call “pig butchering” frauds, fuel much of these vast and sophisticated money laundering networks.
What to look for
Off-ramping. One of the easiest ways for criminals to move money is via crypto-assets on a blockchain, such as Tether (USDT) on the Tron blockchain, or bitcoin. Meanwhile, law enforcement is getting better at tracing and seizing stolen assets. So, the criminals need to convert their tokens to dollars or “off-ramp” money from the blockchain. The criminals might send coins to a digital wallet and instruct you to move the money to your digital-asset trading account, convert the crypto to dollars, and move the cash from your bank to another account.
On-ramping. Criminals could also want you to move dollars to the blockchain by accepting cash, using it to buy crypto-assets—sometimes at a bitcoin kiosk—and forward the crypto to another wallet.
Smurfing. In this situation, you might receive a large amount of crypto to your digital wallet or trading account and you are asked to send several smaller amounts to a list of wallet addresses.
Remember
- Moving money for illegal activities can lead to criminal and civil charges.
- If you are approached online and asked to move money, immediately end communications.
- If you have already received money or crypto assets from a person you met online, do not send it to anyone else. Notify your financial institution and consider changing accounts and wallet addresses, especially if you have provided any personally sensitive information about yourself, bank, or crypto-asset trading accounts.
Immediately notify the FBI’s Internet Crime Complaint Center (IC3) at ic3.gov, and contact your local FBI field office. You can also submit a tip or complaint at CFTC.gov/complaint.
Protecting the Public
The CFTC has participated in an international money mule initiative since 2023 and takes steps to identify and disrupt money mule activity related to fraud schemes that target market customers. Learn more about money mule scams and potential consequences.
