In February of 2021, a Ukrainian man was sentenced to 87 months in prison and to pay restitution of $98,000 for wire fraud, stemming from his participation in a scheme to launder funds for Eastern European cybercriminals.

From 2009 to 2012, Aleksandr Musienko’s partners hacked into online accounts of U.S. companies and stole funds which were then transmitted to accounts overseas.

Musienko was involved in recruiting, supervising and directing a network of “money mules” who, hired as “financial assistants,” believed they were helping clients transfer funds overseas.

In Sept 2011, Musienko’s partners hacked into the online accounts of a North Carolina-based company and transferred a total of $296,278 to two bank accounts controlled by Musienko’s mules.

The rise of digital financial services has opened the door to criminals who leverage the internet and other digital platforms for criminal activity and to conceal and move illegally obtained funds.

Whether it’s cyber laundering or money laundering, the hiding and reinvestment of illegal profit made from a criminal enterprise is key to creating distance from criminal acts and the key to running a successful crime organization. 

And it’s also a critical juncture for detecting and disrupting criminal activity.

Following the Money Mule Trails

In order to create distance from their criminal activities and profits, criminals need to “employ” people who are “innocent” and have no ties to the original crime. 

For this reason, money mules are the first step in the wash cycle.

In the past, money mules were known to cross borders with money strapped to their bodies or travel with briefcases or car trunks full of cash.

These days money mules can work from home, using online banking to transfer money through bank accounts, digital currency, prepaid debit cards, or money service providers.

Electronic laundering cleans illegally obtained funds of their dirty criminal origins for use within the legal economy.

Money mules are recruited through job ads promising easy money for little or no effort.

Money mules, usually students, people out of work, or the lovelorn, are typically asked to open new bank accounts in their name or company. They’re then asked to use these accounts to receive and transfer funds via ACH, mail, or wire transfer. For their efforts, they’re often given a commission or flat fee.

In this way, transnational criminal organizations use mules to channel funds across institutions or borders to obscure the source of funds.

Money mules are also roped in through dating or social media sites and asked to receive money and then forward these funds to one or more individuals they don’t know. Believing they’re helping a loved one in need, these money mules unwittingly break the law and aid one more criminal enterprise to disguise their ill-gotten gains.

Though some money mules are unwitting accomplices, others know they’re supporting criminal enterprises and do it out of desperation, sloth or greed.

Either way, money mules can be prosecuted and incarcerated for their part in this illegal activity that helps criminals cash out of fraudulent schemes and transform illicit funds into legal tender.

Bank Secrecy Act Helps Flag Illicit Transactions

In order to deter money mules and their “employers,” the Bank Secrecy Act (BSA) was created in 1970 to prevent financial institutions from being used by criminals to hide or launder their illicit earnings.

The law prescribes regulations and procedures banks or other financial institutions must follow to detect and deter money laundering.

If a bank uncovers suspicious activity that might be related to money laundering, they’re required by law to file a Suspicious Activity Report (SAR) with the Financial Crimes Enforcement Network (FinCEN).

As part of a SAR and to justify the report, a bank must include all available data related to the suspicious activity.

An investigation like this takes time. Analyzing mountains of data and hundreds to thousands of pages and reports can slow down a process that must be done quickly. Banks have 30 calendar days after the initial detection of the incident to file a SAR.

Traditionally, investigators have had to do a great deal of manual work sorting through the vast data required by the BSA. These methods are time-consuming and may be inefficient, leading to a higher number of backlogged cases.

Investigative tools must keep up with ever-changing technologies in payments and transactions. And automation is emerging as a powerful solution.

Also read: Your A To Z Guide To Preparing a Compelling Narrative For Suspicious Activity Report.

ScanWriter Automation Speeds Investigations

ScanWriter, developed by Personable, is rapidly becoming an essential asset for data preparation and visualization in financial investigations. By automating data entry and generating reports, ScanWriter allows investigators to sort and analyze data quickly, providing insights that can lead to the discovery of fraud, money laundering, and other illegal activities.

Collaboration and organization are critical to successful outcomes in fraud cases, and ScanWriter provides a single platform for safe and efficient collaboration. It allows users to collect and organize data from various sources and share information across departments, streamlining investigations and facilitating prosecutions.

With its easy-to-use interface and data visualization capabili