RCMP, B.C. Securities Commission deliver warnings to 10 suspected ‘money mules’

SURREY, B.C. — Criminals are recruiting people in British Columbia to act as so-called “money mules” to move their ill-gotten funds, including some who don’t fully understand what they’re doing and are also victims of a scam, provincial authorities say.

The BC Securities Commission and RCMP jointly announced Monday that investigators recently hand-delivered warning letters to 10 people in Metro Vancouver who are suspected of sending or receiving funds on behalf of criminals.

The use of the mules is a common tactic in money laundering, helping criminals move their cash by concealing its source and destination, the commission said in a statement. It identified the suspects after uncovering information indicating they had sent or received money or cryptocurrency obtained from victims of fraud.

But Sammy Wu, manager of investigations for the commission, said most of those suspects were on the “unwitting side” of what he described as a “spectrum” of awareness among many people recruited to act as money mules.

That’s why authorities decided to take the step to warn them last month, Wu said in an interview on Monday.

If people continue to move money connected to criminal activity after receiving a warning, they could be charged with criminal or regulatory offences.

“We can hold them accountable, we can charge them under the Securities Act, if we … see their activities continue after they have been warned about it,” Wu said.

Wu said criminals will try to use anyone who is willing to transfer money for them.

They may offer a portion of the funds as payment, promise a job, or start an online friendship or romance. Those transferring the money might think they’re helping a friend or performing a task for an online job, the commission said.

Post-secondary students make a good target for money-mule operations, Wu said.

“They might be looking for an online job or something, they might look for ways to make some extra money on the side,” he said, noting students from outside Canada may be more susceptible because they aren’t as familiar with Canadian financial rules.

The recruitment could come in the form of a text message offering online work and payment. Criminals are “deceiving people to think that they’re actually working on a real job, when in fact, they’re just using their account to launder funds,” Wu said.

Cpl. Arash Seyed of the RCMP federal and serious organized crime unit said at least one international student was among the suspects who recently received warnings.

Wu said one of the 10 people “definitely is a victim of a fraud.”

He said he has seen cases where a victim was duped into making a deposit with their own money, then used by criminals to make a transfer to get it back.

The warning letters are part of a joint effort by the commission and RCMP to fight investment fraud originating overseas and targeting people in B.C., Wu said.

He said the securities commission has received a mounting number of complaints about online investment scams since the pandemic.

Wu said scammers will spend months luring victims into what they believe is a trusted online relationship before convincing them to deposit money into what appears to be an account for cryptocurrency trades or foreign currency exchange.

The fake websites have become increasingly sophisticated and realistic looking, he said. Criminals lead their victims to believe they are making money and may even allow them to make one or two withdrawals before they steal the funds away, he said.

“We have seen people putting hundreds of thousands of dollars, even in the million-dollars mark, by maxing out their line of credit, by obtaining a second mortgage,” Wu said, referring to victims in B.C.

“We have seen a lot of victims’ marriages being ruined by it, because they’ve spent so much money being defrauded by someone they met online,” he added.

The BC Securities Commission was involved in shutting down more than 100 of the fake online investment websites last year, Wu said.

Scammers are using so many obfuscation and “layering” techniques to conceal their money and identities that it’s hard for authorities to know who they are.

With limited overseas enforcement capacity, cracking down on money mules helps disrupt the flow of cash obtained through the scams, Wu said.

Online investment scams aren’t the only kind of crime driving the use of money mules in B.C.

Wu said the commission started noticing “crossover” between suspects of investment fraud and those who police were investigating for additional offences.

Some of the money might have come from investment fraud, some from drug crime, or from robbery, but the bottom line is it represents “ill-gotten gains,” he said.

— By Brenna Owen in Vancouver

This report by The Canadian Press was first published June 10, 2024.

The Canadian Press