Bank warns of hike in ‘money mule’ cases

MANILA, Philippines — The Bank of the Philippine Islands (BPI) flagged on Wednesday what it described to be an industry-wide proliferation of “money mules,” or bank account holders exploited by criminal groups as conduits to move around ill-gotten funds.

In an advisory, BPI reminded its clients and the public to be extra careful and never share their bank account details amid the increase in cases of “money mules,” a form of money laundering punishable by law. This is similar to drug mules although the so-called mules provide financial pipelines for criminals instead of drugs.

These money mules facilitate the transfer of illegally obtained money on behalf of someone else, allowing criminal masterminds to move funds in the country’s financial system while hiding their identity.

Rapid digital adoption

Mule accounts have become more prevalent in the last two years as criminals found an opportunity to take advantage of the rapid digital adoption in the country, BPI’s chief digital officer Noel Santiago said.

“They are usually used as conduits by criminals so that they can launder big sum[s] of money acquired from crimes like online scams, human trafficking, drug trafficking, among others,” Santiago said.

This activity is prohibited under the Anti-Money Laundering Act of 2001. Those who are proven guilty may face jail time, hefty fines and account closure.

Santiago said unbanked Filipinos were at a greater risk of being exploited and recruited as money mules. Based on the Bangko Sentral ng Pilipinas’ record as of 2019, there are more than 51 million adult Filipinos who have no access to bank accounts.

“As in any transition, the criminal minds find ways and means to see where the opportunities are. In the past, to open an account, clients are required to go the branch and present themselves and their IDs — so there’s a natural deterrent for anybody who has an intent to commit a crime or intent for fraud,” Santiago said.

“In the last couple of years, as we shifted to a more digital lifestyle, we made it more convenient for legitimate clients to be onboarded, to be accepted in the financial industry. Now this is where those criminal minds saw an opportunity and say, ‘Maybe I can create digital accounts that can be used as a mule account,’” he added.

Criminals also recruit people with existing accounts in exchange for a few thousands of pesos. These criminals advertise on social media to lure people, he noted.

Unsuspecting victims

“As an example of how these fraudsters do it, they approach unsuspecting victims and borrow their account for the purpose of receiving a remittance from someone. They make the story and the delivery so compelling and attractive. Some accounts are being sold for thousands of pesos for usage. They use social media to advertise and sad to say, some people fall victim to this,” he said.

BPI said it had been working closely with the Bankers Association of the Philippines to strengthen the country’s cybercrime law.

Santiago said requiring mobile number registration would greatly aid efforts to curb and prosecute money mules.

“We have capabilities to keep track of [a] significant amount, frequency, velocity, and even being able to ascertain through artificial intelligence the possible destination before it gets out of the bank. This is among the many tools and efforts that we have. But we also trust that the legislative branch will expedite the amendment and enactment of policies to protect more Filipinos not only from falling prey to the money mule scam, but also from cybercriminals in general,” he said.