Sophos Explains Why Money Mule Scams Are Dangerous
Article by George Norman
On 03 Feb 2011
Paul Ducklin Head of Technology with Sophos, company that specializes in providing antivirus, anti-spam, spyware removal software, network and internet security, has recently talked about the dangers of money mule scams. If you are not familiar with these types of scams, here’s the lowdown.

You receive an offer for a part-time job that goes something like this: you will receive the payment from Company X’s customers via bank transfer; you will pick up the payment from your account; you will take out a commission for yourself, then you will send the money to Company X’s headquarters. The offer appears to come from a big name company to trick you into thinking this is a legit jog opportunity.


The funny thing is that the offer isn’t exactly lying to you – not about what you will be doing at least. Just like it says in the offer, money will be transferred to your account, you will get to keep a sweet commission, you will have to transfer money from your account. Paul Ducklin explains where it will all go bad:

“It will take about a month for the bank or the victims whose accounts have been siphoned off into yours to report you to the cops. Of course, the cops will come knocking to ask you to explain and to justify the legality of all the deposits into your account from the various 'purchase orders' from [Company X]. Which you will be unable to do.

And the bank and the cops will notice that you are not exactly an unwilling participant, since you'll have collected your commission every time. (Of course, you will have reported it to the taxation authorities, and will have paid all necessary sales, service and income taxes, so you won't be caught out there, will you?).”

What will happen next? All the transfers into your account will be reversed; it can be done because they were all electronic. The wire transfers you sent to Company X will not be reversed, so that’s money now owe. The commission you kept? That will most likely be confiscate. So you will be out a ton of money and the authorities will be on you on suspicion of money laundering. The bad guys get to keep the money you sent them while you get to deal with the authorities.

“The bad news, if you're unlucky, is what comes next: investigation, arrest, criminal charges, arraignment, trial, conviction, sentencing and incarceration,” said Ducklin.

Tags: Sophos, Scams, Money mule, Security
About the author: George Norman
George is a news editor.
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