Fraud proceeds rarely remain in the account where they first arrive. Money stolen through scams, account takeovers and payment fraud can be transferred through multiple money mule accounts, split between beneficiaries, consolidated and eventually withdrawn, spent or converted into another form of value. For financial institutions, this means identifying the first suspicious recipient is only part of the challenge.

ZIGRAM’s analysis of money mule activity highlights the importance of following funds beyond the initial account, particularly as criminal proceeds can move through chains of accounts before reaching a cash-out point. Recent analysis from the Financial Conduct Authority (FCA) found that while some mule chains extended across many accounts, cash-out activity was concentrated between the second and fifth mule accounts, with the greatest concentration at the second account. The findings suggest that detection opportunities can extend well beyond the first mule.

A money mule is a person or account used to receive, transfer or withdraw criminal funds on behalf of another party. Some individuals knowingly participate in exchange for payment, while others are recruited through fake job offers, social media approaches, romance scams or promises of easy money. Criminals can also take control of legitimate accounts or create accounts using fraudulent identities.

Whatever the route, the purpose is broadly the same: to create distance between the original fraud and the people ultimately controlling the proceeds. This places money mule activity at the intersection of fraud and money laundering, with the initial fraud generating the funds and the mule network helping to move them.

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