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    This New Financial Scam Could Land You In Hot Water
    The Vault

    This New Financial Scam Could Land You In Hot Water

    November 2019

    This New Financial Scam Could Land You In Hot WaterWe often think of it as “an old person problem”, but being duped by a money scam can happen to anyone. And, in some cases, you may not be aware you’re a victim, or that the scam is part of a much more elaborate scheme. In this case, we’re talking about a money mule scheme

    A mule is a person who is involved in transferring money or illegal goods for someone else— typically illegal and part of criminal activity. (Picture mules carrying saddlebags of money and gold during the Gold Rush, and you get the idea of where the term comes from.)

    In most cases, mules know what they’re doing and that it’s illegal. Drug mules, for example, strap illegal substances to their bodies and try to sneak through airports; money mules willingly help thieves move cash around in exchange for a hefty fee. These are bad guys who know what they’re doing.  

    However, the most recent financial scams are creating money mules out of the most unknowing suspects. It’s no longer uncommon for someone to become a money mule by accident, having been roped into sending money that’s part of an elaborate money-laundering operation. 

    The FBI and other law enforcement agencies have recently stepped up efforts to crack down on money mule schemes, and it’s something you need to be aware of.

    The Set-Up (and why it’s so different and dangerous than ever before)

    It all starts with a bad acting job: a lonely American serviceman looking for love on a dating website who needs money to come visit, a lucrative work-from-home job offer that first involves setting up bank accounts to accept money from “clients” to then send to a boss overseas, an email that appears to be from you and tricks your accounting department into receiving money and paying bills that didn’t really exist. The possible set-ups are endless. 

    We typically think that when such scams occur, it’s a one-victim crime. Someone got duped out of a few thousand bucks, and that’s that. But, here’s the danger in the new scam: The middlemen — the victims — can actually take part in criminal activity by accepting illegal proceeds in bank accounts and sending them off to a third party. That’s money laundering, and it’s a crime. Fall victim to it, and you could be held accountable.

    (The Better Business Bureau estimates there may be a million romance fraud victims in the United States alone, with $1 billion in losses reported in the United States and Canada over a three-year period. Romance fraud victims were pulled into money mule schemes in 20%-30% of those cases according to this 2019 report which also details multiple money mule schemes. )

    Again, here’s the problem: When police become aware of a scheme, they first turn to whoever's name is on the bank account. They follow the money first.

    OK, but why is my CPA warning me about this? 

    As CPAs, we sit in a unique position to spot these schemes and help those who may have fallen victim to them. We also have a voice, the ability to warn our clients and the public about these scams and how they can protect themselves.

    Here’s what we want you to know:

    1. If it seems too good to be true, it probably is.

    If someone is luring you into a job by suggesting you can make money doing almost nothing, that’s a sign things aren’t right.

    If an online romance becomes overly flattering and “serious” very quickly, be aware that a request for money or bank account information isn’t too far behind.

    Trust your gut when something feels off. 

    2. Pay attention to the small details.

    Job postings or other communications riddled with misspellings, poor grammar, or unusual uses of the English language are hints that the sender is from outside the country and not the future employer or lonely widower they're posing as. Pay close attention to how offers appear and delete those that are full of mistakes.

    3. Seek advice.

    If you do receive a request for money or offer that seems like it might be okay but you’re worried it’s not, call us. We promise no judgment. We are happy to answer questions and help you spot sketchy scenarios. 

    4. Protect your aging family and friends.

    While anyone can fall victim to these schemes, aging adults are particularly susceptible. As we age, detecting and avoiding sophisticated scams becomes more difficult, especially as these schemes become more technologically advanced. When we are young, we have the opportunity to protect our parents, friends, and other aging family members.

    We urge you to keep watch over the finances of friends and relatives in their golden years and help them make financial decisions. Having open discussions could help them avoid fraudulent schemes and protect their retirement savings.

    5. Practice safe financial practices.

    Never give, loan, or accept money from online suitors, especially if that money will go to a third party you've never met. Never share bank information or open up accounts for other people. Protect your banking and credit information from unknown persons at all costs.


    With the right steps, you can protect yourself and your loved ones from the constant onslaught of financial scams -- including money mule schemes. 





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