Global Trade

Financial Crime & ‘Money Muling’ – How To Avoid Becoming A Target

“Ignorantia legis neminem excusat”-  A classic Latin Legal principle which means “ignorance of law excuses no one”

Fraud is fraud – So we’re taught.

Lately i’ve have been reading a series of articles and research publications on matters relating to the ever rising cases of financial crime. To be honest, these days it’s hard to look away and simply pretend nothing is wrong. Everything about financial crime is wrong. And it is a global concern. It’s not only wrecking and damaging economies, but also has a direct and harmful corrosive effect on people’s lives.

On this blog post, i intend to focus on a particular issue – Money Laundering. You’ve definitely come across a variety of personal stories, news articles, publications, podcasts, or so, where one or more controversial areas of money laundering are adressed. Money laundering and the environments of illicit financial flows are both prompting a great deal of discussions internationally.

So, what is Money Laundering? The International Compliance Association (ICA) describes Money Laundering as a “process by which criminals disguise the original ownership and control of the proceeds of criminal conduct by making such proceeds appear to have derived from a legitimate source.” (Read more)

And, how are ‘Money mules’ and ‘Money Laundering’ connected?- We’ll get to that in a few seconds.

First of all, there are a number ways this kind of financial crime can occur. The most common and obvious types of money laundering activities include Tax evasion and false accounting practices. How does that happen? The simple answer- The process of money laundering is said to be quite complex. (Read more) 

According to an Europol article –MONEY MULING -Public awareness and prevention -“More than 90% of money mule transactions are linked to cybercrime. The illegally obtained money often comes from phishing, malware attacks, online auction fraud, e-commerce fraud, business e-mail compromise (bec) and CEO fraud, romance scams and holiday fraud (booking fraud) and many others.” (Read on)

The United States Computer Emergency Readiness Team (US-CERT), defines “Money Mules” as – “people who are used to transport and launder stolen money or some kind of merchandise.” In addition, criminals may even recruit ‘willing participants’ who by the way, may not even have the slightest hint that they are being used to commit fraud.

In fact, with today’s economic conditions, becoming a victim of money mule scams can be quite easy. Consider a common scenario you’ve probably seen like the “Work from home opportunities.” I can’t tell you enough how many times i’ve seen people in desperate situations looking for these kinds of opportunities. There is absolutely nothing wrong with the idea of earning money from the comfort of your own home as long as it is legitimate.

But if the ‘deal is too good’ and you probably ‘smell a rat’ then it’s high time to be on your guard.

To get some perspective on the scale of the problem, there’s an article on published Moneymules.co.uk  which also explains how the money mules process works. Basically, the fraudsters may approach individuals anywhere. This could be online or even  on the streets where they ask their victims to receive money into their banks accounts and transfer it to another account keeping some of the cash for themselves. – Doing this means that you’re a money mule and you’re involved in money laundering.

Another scenario-What would you do if you were targeted by someone who poses like an Army Captain? Or even a police officer? On an article published on abc, an FBI tells of a story of a fraudster who actually posed as an Army Captain. He informed his victim that he was trying to make arrangements to travel home. Long story short, the victim received  $10,000 in his bank account. He was then instructed to ‘withdraw it in small increments’ and send it to a woman in Texas. (Read on)

Now we see why there’s high importance in being vigilant. As part of being aware, we should be keen to understand what the source of funds are, and the purpose of a retainer.

Here’s a short clip from CIFAS revealing some of the reasons why criminals need Money Mules

Here are more links to help you learn more about ‘money muling’

Why Corporate Shared Value (CSV) exceeds Corporate Social Responsibilities (CSR)

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest.”

Adam Smith, 1776 (An Inquiry into the Nature and Causes of the Wealth of Nations)

Studies show that many business executives view the concept of Corporate Social Responsibility (CSR) as a challenge. The biggest challenge for some of these executives is finding a suitable strategy and approach, which they could apply to make their business organizations profitable and at the same time be responsible towards the society.

According to sources, the fundamental problem begins with a misunderstanding about what Corporate Social Responsibility really is. Many researchers and experts in this field have repeatedly pointed out the problem of a lack of  a single and universally accepted definition of what CSR is. It is no surprise that there is plenty of confusion about what constitutes CSR activities.

In fact, one of the leading experts in this field, the late professor William Frederick, openly highlighted in his book ‘Corporation, be Good!: The Story of Corporate Social Responsibility’ the problem of not finding an actual accepted definition  of CSR. In his book, he stated that “the actual meaning of CSR has dogged the debate from the beginning.”

More recent studies focusing in CSR, not only highlight the obvous problem of a lack of universally accepted definition, but also the lack of a proper understanding of the essential nature and purpose of a business organisation. A major dilemma lies in the –‘why’ and ‘if’ Profit seeking companies should also engage in social responsibilities especially in cirumstances where there is clearly limited or no financial benefits.

As a result,  Professor Michael Porter and Mark Kramer coined the Term ‘Corporate shared Value’ CSV  as a means to resolve this dilemma. The concept of Corporate Shared Value goes beyond Corporate Social responsibility. As described on article on The Institute for Strategy and Competitiveness, Michael Porter describes  Creating shared value  as-

“ a framework for creating economic value while simultaneously addressing societal needs and challenges. When businesses act as businesses—not as charitable donors—they can improve profitability while also improving environmental performance, public health and nutrition, affordable housing and financial security, and other key measures of societal wellbeing. Only business can create economic prosperity by meeting needs and making a profit, creating infinitely scalable and self-sustaining solutions”-Michael Porter, Havard Business School

On the following link, Professor Michael Porter explains the CSV in depth and how applying the capitalism model can help address problems of the society.