Alert: Don't let your bank a/c be used for money laundering

Firstpost reported yesterday how private sector banks, including HDFC Bank, Axis Bank and ICICI, appear to have been targeted in a sting operation conducted by digital magazine CobraPost with the supposed objective of discovering money laundering. (Read the whole story here.)

But if you think it has nothing to do with you, think again. There are ways in which you could become an inadvertent victim of someone else’s money laundering efforts. Says Mayur Joshi, CEO, Indiaforensic.com, a financial fraud investigation company, “A large number of people are becoming victims of money laundering in our country today by becoming Money Mules. Simply put, you become a money mule when you unwittingly participate in a money laundering activity, by allowing the fraudsters (money launderers) to use your bank account for their money laundering activity.”

[caption id=“attachment_662808” align=“alignleft” width=“380”] But if you think it has nothing to do with you, think again. Reuters[/caption]

How it works:

Joshi says: “The fraudsters could get in touch with the victim (money mule) via online or offline route. Via the online route it’s usually an email job offer which looks genuine, or via public chat rooms.” A typical way this works is as follows:

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1. You (potential money mule) get a job offer via an email or in a pubic chat room. Joshi says, “The job description says it’s financial management work and requires you to simply transfer funds, which the fraudster or his agent transfers to your bank account”

2. Of course, these companies/ firm/ enterprise are fake, but they may give you official looking papers to sign or a fake contract.

3. You receive funds in your account from them or their agents, and you have to transfer these funds. Your compensation is not a fixed salary, buy a commission of the amount of funds you transfer to overseas accounts.

4. In short, you think you are doing your job, but in reality, you are using your account for money laundering activity.

Here’s an example of such one such fraud email:

Hello !

My name is Morgan Smith, I am an artist and own SUS Art World in London (United Kingdom), and have 23 years of art work experience. I have sold in galleries and to private collectors from all around the world.

I am always facing serious difficulties when it comes to selling my art works to America and India. They are always offering to pay with credit cards only, which is difficult for me to cash here in London, United Kingdom. Also, I’m setting a large factory and estate in India.

I am looking for a representative in the India who will be working for me as a petite worker and I will be willing to pay 10 percent for every transaction, which wouldn’t affect your present state of work. Someone who would help me receive payments from my customers in India means someone that is responsible and reliable, because the cost of coming to the state and getting payments is very expensive and time consuming. I am working on setting up a branch in the India; for now I need a representative in India who will be handling the payment aspect for my company.

These payments will be made via bank transfer only and they would come to you in your name if you are willing to assist as a representative, so all you need to is to open a new account with ABC bank India where my customers in India and United States can be transferring money to you. After deducting your 10 percent you will then wire the rest to my contractor in India. If you are interested ,I want you to open an account with ABC bank India and forward all the banking information to me, including your international passport first three page, birth certificate and election card to me.

Sincerely

Morgan Smith

SUS ART WORLD.

NB: All charges will be deducted from the money, so you are rest assured that you wouldn’t spend a dime out of your personal money.

If you are interested, please get back to me as soon as possible via email with the following listed information below:

#Your full name:

#Your full home address,

#Your age,

#Occupation and as well your

#marital status, and your,

#direct contact telephone number,

#Drivers License / International Passport

Thanks for your assistant and God bless,

Offline offer: This is just an example, where the fraudster sent a email to recruit you as a money mule. Joshi says, “Instance have been know where agents have contacted people (potential money mules) and offered them a commission to use their accounts for a small commission. Of course, since the potential mule has already done their KYC norms and has a bank account, they meet the fraudster’s requirement.” All they say is that they would transfer funds to your account, you get to keep a commission, while you have to give them your ATM card/cheques, etc, from which they would withdraw the remaining funds. That’s not all, these days fraudsters even make fake websites of genuine companies and offer such fake financial management jobs via the websites.

What you can do: Be careful of emails or website job offers which ask you to be representatives of overseas companies and the job description is financial management. Any company which offers high commissions simply to transfer funds should be a red flag. If you take a look at the sample email, you will see that there are spelling mistakes and grammatical errors, this again works as a red flag.

Dead accounts: Now you might say you are smart enough not to be a money mule and can identify a fake email job offer from a genuine one. Okay, may be you are smart. But their is one more way you could be a victim of money laundering activity. Every time you switch jobs, you leave behind a savings account which you fail to use after a few years. This account becomes a dormant account and can be easily used for conducting money laundering activities by dishonest bank staff. And if you go by the Cobrapost story, it looks like such bank staffs aren’t an extinct tribe. If you have dormant accounts, it’s best you close them as soon as possible.

Last word: Even if you inadvertently participate in money laundering by becoming a money mule or because your dormant bank account was used, you still could face severe penalties and/or imprisonment under the anti-money laundering law.