Criminals using Covid-19 crisis to recruit money laundering mules via social media, experts warn

Growing threat of financial hardship and more time spent at home gives fraudsters greater opportunity to lure people into laundering money from human trafficking, drugs or terrorism financing, Ben Chapman reports

Trade association UK Finance is urging people to be aware of coronavirus-related 'smishing' text message scams (Getty Images/iStockphoto)

Criminals are exploiting the coronavirus pandemic to recruit money mules via social media to launder cash from human trafficking, terrorism financing or drug dealing, experts have warned.

Social media mule recruitment is being ramped-up in recent weeks after legitimate sources of income, such as hospitality or retail work, dried up almost entirely due to lockdown measures and people have become more vulnerable to scams.

Fraudsters are also using bereavement scams that target the relatives of people who have died from Covid-19 purporting to be debt collectors recovering debts incurred by the deceased, according to Cifas, the UK’s fraud prevention service.

There are many different ways to recruit money mules, who pass money from illegitimate sources through their bank accounts to make it appear clean, says Araliya Sammé, the head of financial crime at fraud prevention firm Featurespace.

These gangs are targeting students and people under 25 because they are particularly likely to be out of work at the moment, she explains.

“They are spending much more time in front of their screens waiting for the situation and on social media platforms.

“It could just be a pop-up promising a quick and simple way to earn money from home.

“With Covid-19, there are many more people who have lost their jobs, been made redundant or furloughed so criminals can target those people as well, through different recruitment sites as well."

In a recent poll by Featurespace, around a quarter of people said they did not believe they would be committing a criminal activity by carrying out money mule activity; but the case of two British students jailed last year for laundering dirty cash shows that the consequences can be serious and ignorance is not a defence.

“On the very dark side it can be funding terrorism, human trafficking, drugs and all of these things,” says Ms Sammé. “This is something that many people just don't realise."

Another scam on the rise during the pandemic is taking advantage of people’s desire to help others - targeted emails or websites appearing to represent legitimate charities can be used by fraudsters trying to recruit money mules.

“They will ask you to register to feel like you are doing something valuable and the next thing you know is that you have been asked to send some money, or facilitate a bitcoin exchange,” says Ms Sammé.

Typically, a target will receive an email, they believe they are registering for a charity. First they give them a bit of activity to do so the individual feels they are fulfilling their tasks as part of the charity.

Later they will say "we'd really like you to send some money for the charity" for a specific reason or an institution that they've identified, Ms Sammé explains. They ask mules to cash out some bitcoin into their account and send the money on.

How to deal with unexpected emails or texts

Advice from Cifas

Impersonation emails and SMS texts

If you receive an email, text or WhatsApp message out of the blue purporting to be from the government, HMRC, World Health Organisation (WHO) or a charity about coronavirus, then take a moment to think before you before part with any money or information. Never click on any links or download attachments as fraudsters will try to get victims to download malware or enter their personal details into fake websites which can be used to steal your identity.

Phishing calls

If you receive a call offering protective face masks, hand sanitiser, testing kits, medicine, etc, be aware that they may not always be legitimate. If you do receive a call, don’t be afraid to hang up and research the company first. We have also been notified about a large number of victims ordering goods over the phone or online, offering up their bank details, and items never arriving.

“This is one way to use Covid to target a wider pool of vulnerable people who are generally law-abiding, who just want to help in these difficult times. People are just abusing that," she explains.

Criminals build up a relationship with people who may later realise that they are involved in criminal activity, a fact that gangs then exploit to coerce mules into further transactions.

Some criminals have even been found to be coaching money mules about what to say to avoid detection if a bank flags a transaction as suspicious.

“By this stage, you probably feel very isolated and don't know what to do or how to ask for help. You may feel you are doing something wrong but don't want to speak to the bank," says Sammé. “You can't really claim ignorance any more but you can’t stop."

The UK is a hub for money laundering, with hundreds of billions of dirty cash thought to wash through the City of London each year, according to a Treasury Committee report last year.

The number of money mules has risen sharply in recent years, according to the UK's fraud prevention service, Cifas. It found a 75 per cent jump in the number of young people cleaning money for criminals in 2017 and a further 24 per cent rise in 2018.

The police are not turning a blind eye but, while the wider criminal networks can be tough to crack, it is often the mules who are easier to catch in the act.

Banks are using increasingly sophisticated algorithms to try to help identify suspicious transactions that more standard money laundering checks might not pick up.

These can monitor behaviours and flag any activity that does not fit with an individual’s profile.

Cifas is warning people to be particularly vigilant about any texts emails or calls they receive throughout the Covid-19 pandemic.

Last week, the organisation identified “callous fraudsters” who were targeting the recently bereaved relatives of Covid-19 patients posing as debt collectors.

Cifas is advising people to never respond to calls, emails or letters that they receive unexpectedly, and to talk to friends and family if they are concerned.