Betting mules: What is it and how to avoid them

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Authorities busting online gambling rackets are ending up at dead ends as bank accounts on which the investigation is relied on to catch the culprits are opened with fake identities. A 2021 report of UN Office of Drugs and Crime referred this activity as ‘betting mule’.

Betting mules are individuals whose identities are used to create multiple online bank accounts, using identity theft. Organized crime groups take direct ownership of these accounts, using them for operating betting platforms and ultimately laundering money out of the country. Often the number of accounts operated by these entities run into thousands.

Only a few bank account mules know that they are supporting something illegal; others are unaware that there account is used for illegal purpose. Those who are aware let the criminals use the bank account for a commission while those who are unaware do not have any financial interest.

But when online betting gangs are busted, the only reliable footprint to catch the culprits is the bank account and the identity documents submitted to the banker for opening the bank account.

When law enforcement agencies end up at the  doors, mules taking commission are unaware of the extent of the scam while those unaware of the misuse have no information and often plead ignorance. Irrespective of whether you knowingly let fraudsters use your bank account or not, when the account belongs to you, you will be subject to criminal investigation.

Individuals are advised to avoid lending bank accounts even to acquittance and must often check income tax reporting to understand transactions taking place against their name. Chattisgarh police recently arrested few individuals operating bank accounts by misusing identities of acquittance to launder betting money.

US Consumer Financial Bureau lists down the following red flags to identify mule accounts:

  • Don’t agree to receive or send money or packages for people you don’t know or haven’t met in person.
  • Don’t take a job that promises easy money – especially if it involves sending or receiving money or packages.
  • Don’t open a bank account or cryptocurrency account at someone else’s direction.
  • Don’t send money to an online love interest, even if they send you money first.
  • Don’t pay to collect a prize or send someone money out of your “winnings.”

Recently, the Financial Intelligence Unit (FIU) has informed the Parliamentary Standing Committee on Finance said that reporting entities have flagged suspicious transactions linked to several offshore gaming entities that involved mule accounts and listing groceries as business activity.