Bank warns of rise in ‘money mule’ cases


MANILA, Philippines — The Bank of the Philippines Islands (BPI) on Wednesday reported what it described as an industry-wide proliferation of “money mules,” or holders of bank accounts operated by criminal groups like intermediaries to move ill-gotten funds.

In a notice, BPI reminded its customers and the public to be extra careful and never share their bank details in the face of increasing cases of “money mules”, a form of money laundering punishable by law. This is similar to drug mules although so-called mules provide financial pipelines to criminals instead of drugs.

These financial mules facilitate the transfer of illegally obtained money in someone else’s name, allowing criminal masterminds to move funds through the country’s financial system while hiding their identity.

Rapid digital adoption

Mule accounts have become more prevalent over the past two years as criminals have found an opportunity to take advantage of the country’s rapid digital adoption, said BPI Chief Digital Officer Noel Santiago.

“They are usually used as conduits by the criminals so they can launder large sums[s] money from crimes like online scams, human trafficking, drug trafficking, among others,” Santiago said.

This activity is prohibited under the Anti-Money Laundering Act 2001. Those found guilty face prison terms, heavy fines and account closure.

Santiago said unbanked Filipinos are at greater risk of being exploited and recruited as financial mules. Based on the record of Bangko Sentral ng Pilipinas in 2019, there are over 51 million adult Filipinos who do not have access to bank accounts.

“As with any transition, criminal minds find ways to see where the opportunities lie. In the past, to open an account, customers had to go to the branch and introduce themselves and their IDs. So there is a natural deterrent for anyone who has the intent to commit a crime or an intent to defraud,” Santiago said.

“Over the past couple of years, as we transitioned to a more digital lifestyle, we’ve made it easier for legitimate customers to be onboarded, accepted into the financial industry. Now, that’s where those criminal minds have seen a opportunity and said, “Maybe I can create digital accounts that can be used as a mule account,” he added.

Criminals also recruit people with existing accounts in exchange for a few thousand pesos. These criminals advertise on social media to attract people, he noted.

Unsuspecting Victims

“As an example of how these scammers do it, they approach unsuspecting victims and borrow their account in an effort to receive a payout from someone. They make the story and delivery so compelling and engaging. Some accounts are sold for thousands of pesos for use. They use social media to advertise and unfortunately some people fall victim to that,” he said.

BPI said it has worked closely with the Philippine Bankers Association to strengthen the country’s cybercrime law.

Santiago said requiring the registration of a mobile phone number would greatly help efforts to curb and prosecute financial mules.

“We have the capacity to follow [a] a large quantity, frequency, speed and even the possibility of determining, thanks to artificial intelligence, the possible destination before it leaves the bank. This is one of many tools and efforts at our disposal. But we are also confident that the legislature will expedite the modification and enactment of policies to protect more Filipinos not only from financial mule scams, but also from cybercriminals in general,” he said.

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