November 28, 2017 / 4:28 PM / 2 years ago

EU uncovers $36 million in week-long crackdown on 'money mules'

LONDON (Reuters) - European law enforcement agencies uncovered $36 million in illicit money transfers and made 159 arrests in less than a week as they stepped up a crackdown on so-called money mules, Europol said on Tuesday.

Bitcoin (virtual currency) coins placed on Dollar banknotes are seen in this illustration picture, November 6, 2017. REUTERS/Dado Ruvic/Illustration

Around 90 percent of 1,719 illegal transactions identified during the short campaign were linked to cyber crime, with cryptocurrencies like Bitcoin playing an increasing role in money laundering schemes, Europol said.

The European Union’s law enforcement agency said the campaign, carried out from Nov. 20 to 24 in coordination with banks, had pinpointed more than 800 people participating in or organizing ‘money muling’, whereby often unwitting individuals are enlisted to help criminal organizations launder their proceeds. Only 159 arrests were made.

Money mules usually receive illicit funds into their bank accounts to hold or withdraw and wire elsewhere, taking a commission for their services, with the practice forming an increasingly key component of organized crime. Recruiters prey on vulnerabilities like the mules being new to a country, unemployed or in financial distress.

Total global money laundering is estimated at up to $2 trillion every year - a process that fuels illegal activity from fraud to human trafficking and helps its perpetrators remain anonymous.

This was the third such coordinated campaign between EU law enforcement agencies and banks against money mule operations, and broke from its predecessors by targeting organizers and recruiters as well as mules.

Even if money mules act unwittingly they can still face prison sentences, fines or other penalties, and, after being marked as involved in money laundering, the prospect of being locked out of the financial system and unable to even open a bank account.

In Britain alone, the number of money mule cases increased by around 50 percent between 2016 and 2017 to almost 24,800, according to fraud prevention body Cifas, with the biggest increases seen among the youngest (those under 21) and the oldest people (those over 60) being used as mules.

“This is a serious issue that not only has consequences for the money mule, but for society as a whole,” Simon Dukes, chief executive of Cifas, said when the figures were published on Monday.

“The criminals behind money mules often use the cash to fund major crime, like terrorism and people trafficking.”

Law enforcement agencies from 26 countries spanning the European Union, eastern Europe and the United States participated in the Nov. 20-24 campaign, along with 257 banks and private-sector partners, Europol, judicial cooperation agency Eurojust and the European Banking Federation.

Reporting by Emma Rumney; Editing by Susan Fenton

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