US cracks down on money laundering schemes

US Department of Justice announced that over 4,000 lawsuits were initiated in 3 months in the fight against money mules involved in romantic scams (romance scam), business email compromise (BEC attack), and other fraudulent schemes.

Money mules are people who provide money transfer services (sometimes unintentionally) to launder stolen funds. Some of the mules are willing participants in the scam, taking money from the victims and then transferring it to the scammers. Others may be involved in a scam against their will – they may accept and transfer funds on request, not realizing that they are helping criminals transfer cash.

Law enforcement actions have been directed against both types of mules. The operation involved the FBI, the Department of Justice, the Internal Investigation Service and the US Postal Inspection Service (USPS). The USPS played a major role in the investigation, during which nearly 4,000 letters were delivered warning people that their activities were conducive to fraud.

A USPS spokesman noted that anyone can be called a money mule, but criminals often target students, job seekers, and people on dating sites. When mules use US Post to send or receive funds from scammers, postal inspectors quickly intervene and stop the money mules from operating.

In addition, 12 civil and administrative lawsuits and criminal cases were initiated against 25 people for their involvement in money laundering processes.

One of the perpetrators, 73-year-old Craig Clayton from the United States, was arrested in February for using his accountancy and “virtual CFO” business to launder proceeds from internet fraud schemes.

Between 2019 and 2023, Clayton allegedly set up 65 shell companies in the US and used them to open about 80 bank accounts. Then the criminal transferred more than $35 million through open accounts for his clients, taking a commission for himself.

In another case, defendant Nachiket Banwari, 34, from the United States, was implicated in a multi-million dollar tech support scam. According to the case file, Banwari used fake internet pop-up ads to freeze the victims’ computer screens and make them think the victims needed tech support to fix the problem.

The ads displayed the phone numbers of the Banwari scam companies, and when the victims called the ad’s number asking for help, they were tricked into buying services to solve non-existent computer problems. In this way, Banwari scammed thousands of victims, many of them elderly, out of more than $7 million.

Law enforcement efforts this year represent the fifth campaign to eliminate money mule networks. Government agencies have taken action on more than 12,000 fraud cases since the first campaign, which involved about 400 law enforcement agencies, and say these efforts have made it harder for criminals to profit from fraud.