It may arrive as a Telegram message after you post online that you are looking for work. It may promise easy money, a well-paid job from home or a commission for letting someone use your Bit, PayBox or bank account because, they claim, their own account has been blocked.
In today’s difficult economic climate, such offers can seem attractive, even harmless. But behind them may be a sprawling international criminal network that turns ordinary people and their smartphones into essential tools for moving illicit funds.
The practice is known as money muling. Those recruited, commonly called “money mules,” receive or transfer funds on behalf of others, helping criminals conceal both the source of the money and the identity of those controlling it.
Israeli law enforcement agencies have been familiar with the phenomenon for years, but efforts to curb it, particularly over the past five years, have achieved limited results. The practice continues to expand and is estimated to move billions of shekels through Israel alone.
Criminal organizations involved in gambling, drug trafficking and other illegal activity, as well as terrorist groups, need accounts through which they can receive and transfer money. Bank accounts registered in their own names are generally not an option, while cash cannot always be moved quickly or discreetly.
Online banking and digital wallets offer a solution, but they also present an obstacle: Accounts are linked to phone numbers, login credentials and biometric identification.
The criminals’ answer is to recruit the legitimate owner of a bank or digital-wallet account.
Account holders are paid a commission for allowing their names or accounts to be used, while the criminal gains access to financial services that appear to belong to an ordinary customer.
Recruitment typically takes place on social-media platforms, Telegram channels and similar services. The advertisements tend to follow a familiar pattern: “Want to earn money from home?” “Easy work with no commitment” or “Come work in online poker.”
Money mules are often ordinary people. Some do not realize they are participating in a crime. Others understand the risk but are willing to take it in return for quick cash.
They receive money in their personal accounts and transfer most of it to a third party, keeping a commission. In legal terms, this is a classic form of money laundering.
For example, 20,000 shekels ($6,600) in illegal gambling proceeds may be deposited into a mule’s account. The account holder then transfers 19,000 shekels ($6,200) to someone linked to the criminal organization and keeps 1,000 shekels ($330).
It may look like easy money, but it carries serious legal consequences.
A pipeline for criminal proceeds
Money mules are used to conceal both the identities of the criminals behind the transactions and the illegal source of the funds.
A mule’s clean criminal record and apparently legitimate bank account are central to the scheme. Transactions passing through an account that has not previously raised suspicion are less likely to be blocked or investigated immediately.
Evidence indicates that criminal organizations deliberately target young people, students and those facing financial hardship. They lure them with work-from-home offers requiring no professional experience but promising unusually high pay for carrying out simple financial transactions.
In practice, those recruited become conduits for money generated through phishing scams, cyberattacks, drug trafficking and other crimes.
Israeli cybersecurity company BioCatch has identified several categories of money mules.
Some are criminals who open accounts using fabricated or stolen identification documents and use them to launder their own money or funds belonging to other offenders.
(Photo: Melinda Nagy / Shutterstock)
Others knowingly agree, in return for a commission, to transfer criminal funds through their personal bank accounts. Dedicated Telegram marketplaces have emerged where criminals and prospective mules can find one another.
A third group consists of people deceived by fraudulent recruitment advertisements. They believe they have accepted legitimate, profitable work from home and may not understand where the money comes from or the seriousness of the offense they are committing.
There are also fraud victims whose accounts are used without their knowledge. Rather than stealing money directly from them, criminals exploit access to their accounts to transfer other illicit funds.
The scale of the problem becomes clearer when viewed within the wider global financial-crime economy.
A recent Nasdaq report estimated that approximately $3.1 trillion in illicit funds moved through the global financial system in 2023. The money originated from crimes including human trafficking, drug trafficking and terrorism financing.
According to Europol data cited in the report, approximately 90% of identified mule accounts are used to launder proceeds from fraud and cybercrime.
From financial crime to national-security threats
Money-mule networks can also overlap with more complex national-security threats.
Israeli authorities have uncovered numerous cases in recent years in which hostile foreign actors, particularly Iran, allegedly used digital platforms to recruit Israelis for espionage and terrorism-related assignments.
Recruitment can begin with an apparently simple offer of paid online work. The tasks may later escalate to photographing sensitive locations, gathering intelligence or damaging infrastructure.
Payments are sometimes made in cryptocurrency to obscure the financial trail.
Israeli security officials have said financial incentives have become a central tool in efforts to recruit citizens for hostile activity. The same payment and account networks used by criminal organizations can also help hostile actors bypass sanctions and finance terrorism.
BioCatch is attempting to combat the phenomenon using behavioral-biometrics technology.
Its systems help banks distinguish between the normal activity of legitimate customers and behavior associated with account takeovers, fraud or money-mule activity.
The company says mule accounts display numerous subtle behavioral and technical indicators. These may include unusual transaction frequency, how long a device has been associated with an account and hundreds of other data points that, when analyzed together, can signal suspicious activity.
Young account holders are prime targets
BioCatch data shows that 65% of identified money-mule accounts in Britain belong to people aged 30 or younger.
The problem is also expanding rapidly elsewhere. The number of detected mule accounts in the United States rose by 14% between 2019 and 2023, according to the company.
One of the most troubling aspects of the phenomenon is the apparent lack of awareness of the possible punishment.
In the United States, the average prison sentence for money-laundering offenses is 71 months. In Britain, offenders can face up to 14 years in prison. In Australia, sentences range from one year to life imprisonment, depending on the offense and the circumstances.
BioCatch CEO Gadi Mazor
(Photo: Yariv Katz)
“There is a network of hundreds of thousands of accounts around the world known as mule accounts, which are used to transfer criminal proceeds in a way that makes it extremely difficult for authorities to track them,” BioCatch CEO Gadi Mazor said.
“Fighting money mules could deal a serious blow to organized crime because this is a critical lifeline without which it becomes very difficult for them to operate,” he said.
“From an Israeli perspective, this fight is even more crucial because the same mule accounts are also used to bypass economic sanctions and finance terrorism.
“Regulators around the world are placing increasing pressure on financial institutions to accept responsibility and combat money laundering. It can be done, and it is important that it happen here as well.”
‘More firefighting than a real solution’
In Israel, discussion of the issue has largely remained focused on regulatory deliberations and efforts to stop fraudulent text messages.
Critics argue that these measures amount to treating the symptoms rather than addressing the root of the problem.
Law enforcement agencies stress that Israel’s Prohibition on Money Laundering Law treats money mules seriously. That warning, however, does not appear to be reaching the young and financially vulnerable people most frequently targeted by recruiters.
Without a broader change in approach, including closer cooperation among banks, regulators and law enforcement agencies, alongside an active public-awareness campaign, experts warn that the phenomenon will continue to thrive at the expense of unsuspecting citizens.
Israel’s Money Laundering and Terror Financing Prohibition Authority said it had been familiar with the issue for several years and had previously published a strategic review and a document outlining warning signs associated with the phenomenon.
The document was distributed to the financial sector and law enforcement agencies and is available on the authority’s website, it said.
The authority added that Israel’s anti-money-laundering and counterterrorism-financing regime, including customer-identification requirements and monitoring of financial activity, applies to the digital-payment applications mentioned in the report.
The Bank of Israel is the relevant regulator, it said, adding that the authority works closely with the central bank on the issue.
Bit said it operates advanced systems to monitor, identify and prevent irregular activity and continually invests in protecting users and securing its platform.
“When suspected irregular activity arises, it is handled in accordance with procedures and in cooperation with the relevant authorities when necessary,” the company said.
“Attempts to exploit payment platforms for fraud are known in Israel and around the world. Addressing them requires cooperation among payment companies, banks, law enforcement agencies and regulators.”
PayBox said the company operates under strict supervision by the Bank of Israel.
“As part of this framework, PayBox takes active measures to identify customers with high-risk profiles, implements advanced controls and uses monitoring tools to prevent fraud,” it said. “The company also reports to the authorities in accordance with the law and the regulations that apply to it.”
The Bank of Israel did not respond to a request for comment.