Never share your financial details with anyone you meet online. And close all dormant and unused accounts
Between 2010 and 2017, a number of Indian banks participated in money transfers (both inbound and outbound) that had been red-flagged by the US Treasury’s arm, Financial Crimes Enforcement Network (FinCEN), for suspected money laundering
and financial fraud.
At the individual level, many people are motivated by greed and willing participants in such crimes. Sometimes, a person can also become an unwitting participant in a money-laundering operation.
Someone who allows his bank account to be used for money laundering
is referred to as a ‘money mule’. Says Prashant Mali, president and founder, Cyber Law Consulting: “A money mule is a person whose account is compromised and used by a fraudster. This can happen with or without his knowledge.”
In the online world, the modus operandi for such an operation could be as follows. A potential money mule could be offered a job. The job description says it’s financial management work and requires the employee to transfer funds.
Says Mayur Joshi, chief executive officer, Indiaforensic, a company engaged in the prevention, detection, and investigation of frauds: “Under the pretext of an online job scheme, fraudsters ask people to use their existing personal bank account, or open a new bank account in their name, to receive money from someone they have never met in person. The mule is instructed to transfer money to a designated person or account. He may be told to keep a portion of the money transferred or may be paid a fee separately.” The victim deludes himself into thinking he is doing a job.
Some people willingly participate in such operations. Says Mali: “They get around 10 per cent of the money deposited in their account. When an account is used with a person’s consent, he becomes an abettor, and is liable for the same punishment as the fraudster.” Many people get lured without fully understanding the implications. Says Ritesh Bhatia, Mumbai-based cybercrime investigator and cybersecurity consultant: “To many teenagers, housewives, and senior citizens, 10 per cent appears to be a very attractive return just for renting out a savings account.”
Even dormant bank accounts, which people leave behind when they switch jobs, are sometimes misused for conducting money-laundering activities, with the connivance of dishonest bank staff.
What are the red flags to watch out for? Know that a legitimate company will never ask you to use your personal bank account for transferring its money. Says Joshi: “Do not accept a job offer where you are asked to do this sort of a thing.”
Also, never share your financial details with anyone you meet online. And close all dormant and unused accounts. In the offline world, be careful while procuring photocopies of know-your-customer documents. Says Bhatia: “If you are not watchful, the photocopier operator could take an extra facsimile and sell it in the market.” Those documents could be used to open a bank account, which could then be used for money laundering.