Money Mule Networks Are on IRS Criminal Investigation’s Radar

What are money mule networks, and why is the IRS Criminal Investigation (IRS-CI) unit warning taxpayers about them?

This month IRS-CI has joined forces with federal partners—including the Justice Department, the FBI, and the Department of Labor Office of Inspector General—to take part in an annual, multiweek effort deemed “The Money Mule Initiative” aimed at identifying and prosecuting facilitators of money mule schemes.

According to the Justice Department, money mules are people who, at someone else’s direction, receive and move money obtained from victims of fraud. Some money mules know they’ve been recruited to assist criminal activity—and knowingly moving money for illegal activities can lead to serious consequences, including criminal charges. Others move money not knowing that their activity benefits fraudsters and harms others.

“They may think they’re helping a friend, doing a favor for a love interest, or performing job duties, but the consequences—often in the form of criminal charges—remain the same for witting and unwitting participants,” IRS-CI said in a media release on March 12.

Money mule networks recruit participants through a variety of means, including social media, employment and dating websites, email spam, classified ads, and dark web forums, according to IRS-CI. Facilitators of these networks may send an unsolicited email or social media message that promises easy money with little to no effort. They may pose as a prospective employer who requires a job candidate to open a bank account to receive and transfer company funds as a condition of employment. They may strike up an online relationship and then ask their romantic partner to transfer funds on their behalf using money from a services business, wire transfer, or the post office. At times, the mule may be told to keep a portion of the funds for themselves, making them a recipient of illicit money.

IRS-CI advises taxpayers who believe they are unwittingly part of a money mule network to:

Immediately stop all communication with suspected criminals;
Not transfer money or any other items of value;
Maintain receipts, contact information, and relevant communication like emails, chats, and text messages; and
Notify your local IRS-CI field office and report suspicious activity to the Internet Crime Complaint Center (IC3). Contact information for IRS-CI’s field offices can be found in the agency’s annual report.

“Fraudsters prey on people’s vulnerabilities—whether that’s the need for friendship or the need for a job—and that can result in devastating financial and legal consequences for a person recruited as a money mule,” IRS-CI Chief Jim Lee said in a statement. “The best way to protect yourself from falling victim to one of these schemes is to know what to look for and to contact law enforcement if you suspect suspicious activity.”