By David Brandolph
Everyone needs to know about a type of financial scam that’s been exploding in frequency and could cause victims to lose their life savings, including their retirement nest egg. The scam uses “money mules” to hide or launder illegally obtained money.
Money mules are people recruited by fraudsters to receive funds coming from fraud victims and transfer that money back to the criminals. Some money mules are willing participants in the scam and know they are committing a crime. However, many are victims themselves and are unaware that they are participating in a scheme where not only could they lose their savings, but they could be criminally prosecuted and required to repay those they harm.
Often behind these scams are international criminals looking for people who live in the U.S. to help them escape the gaze of law enforcement by hiding the source of their illegally obtained funds. Although these criminals target people of all ages to be money mules, fraudsters frequently seek out older adults, Jacqueline Blaesi-Freed, assistant director at the U.S. Department of Justice, Consumer Protection Branch, said during a recent webinar on such scams. She said these scams often involve romance fraud, lottery winning schemes or job postings promising easy money for little work.
Criminals may view people who are approaching or in retirement to be attractive targets because older adults often have more assets available to fleece, such as pension and Social Security payments, hefty 401(k) account balances and a lifetime of savings. Some less well-off retirees may also be ripe for these scams because they are so worried about outliving their savings that they overlook the tell-tale signs of shadiness surrounding a fraudster’s easy-money-job-offer.
Others who are on their own for the first time after losing a spouse or on medications that diminish their ability to think clearly can “sometimes be wrapped up in these scams,” Sarah Galvan, directing attorney, Elder Rights, National Center on Law and Elder Rights (NCLER), Justice in Aging, said during the webinar.
Another attorney on the panel, Jane Handley, staff attorney, LAVA Project (Legal Assistance for Victimized Adults), Indiana Legal Services, walked webinar viewers through an actual money mule case where she represented the victim.
In the case, Handley’s client was living alone and isolated for the first time in her life after her spouse was admitted to a nursing care home. Soon thereafter, the client received Facebook messages from a fraudster, posing as an old friend, who the client later discovered had been the victim of a Facebook-account-hack.
As the scheme developed, the fraudster befriended the client, had the client provide the fraudster with personal bank card and Social Security information, and enmeshed the client in a project where she was receiving merchandise and cash, which was then sent or delivered to various in-state and out-of-state locations. All the while, the client thought she was helping people get out of poverty.
When the client finally realized it was a scam, she immediately reported it to the police. Although the police didn’t charge the client with a crime, her bank demanded that she pay $22,000 to compensate it for her fraudulent activity.
To avoid becoming a scam victim or a money mule: Don’t agree to receive or send money or packages from or to people you don’t know or have never met; don’t send money to an online love interest even if they send you money first; and don’t pay money to collect a prize or send someone money out of your lottery winnings.
In sum, if someone you’ve met over the phone or online asks you to accept money and send it to someone else, you should stop communicating with them.
Further tips for identifying and avoiding money mule scams can be found on the American Bankers Association’s website.
The webinar, Money Mule Scams: Tips for Prevention, Identification, and Trauma-Informed Assistance, was introduced by Hilary Dalin, director, Office of Elder Justice and Adult Protective Services, Administration for Community Living (ACL), U.S. Department of Health and Human Services.
Sponsors of the webinar included ACL Elder Justice Resource Centers: Adult Protective Services Technical Assistance Resource Center (APS-TARC); National Adult Protective Services Training Center (NATC); National Center on Elder Abuse (NCEA); NCLER; National Long-Term Care Ombudsman Resource Center (NORC); the Pension Rights Center; and the National Resource Center on Women & Retirement (NRCWR).