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Money ‘mule’ incidents in 2021 spike as digital banking surges

MONEY “mules” generated 732,392 suspicious-transaction reports (STRs) in 2021, up 1,277.09%, the Anti-Money Laundering Council (AMLC) reported.

The AMLC said the STRs spiked with the accelerated adoption of digital banking and electronic wallets.

Suspected money “mule” offenses in 2021 were up 50.50% from a year earlier.

“The sharp increase in the number of submitted STRs in 2021 can be attributed to the emergence and accelerated adoption of digital banking and electronic wallets, which did not only provide alternative payment methods but also made financial transactions easier and safer in the midst and in the wake of the COVID-19 (coronavirus disease 2019) pandemic,” the AMLC said.

“This is consistent with the reported volume of PESONet and InstaPay transactions, which posted 164% and 223% growth, respectively, in the first half of 2021,” it added.

PESONet and InstaPay are automated clearing houses launched in December 2015 under the central bank’s National Retail Payment System.

PESONet caters to high-value transactions and may be considered an electronic alternative to the paper-based check system.

On the other hand, InstaPay is a real-time, low-value electronic fund transfer facility for transactions up to P50,000 and is most useful for remittances and e-commerce.

“The annual values of STRs related to money mules likewise spiked in 2021, reaching P505.99 billion or 99.18% of the total value of the captured STRs,” the AMLC said.  

It added that the sudden increase in the value of STRs in 2021 was due to an attempted bank account opening with an initial deposit of $10 billion.

According to the report, most of the STRs were triggered by suspicious circumstances defined by Republic Act (RA) 9160, accounting for 99.77% of the total volume of STRs.

About 45.89% of the STRs were deemed suspicious because there was no underlying legal or trade obligation, purpose, or economic justification.

Suspected money mules utilize three main modes of withdrawing funds: electronic cash cards, automated teller machines, and over the counter transactions.

“Using the available addresses of the reporting branches as proxy for the location of the cash-out facilities used by suspected money mules, it was observed that 54.91% of the withdrawal transactions were performed in Metro Manila. This was followed by Cavite (38.08%), Negros Occidental (2.80%), Laguna (2.10%), Pampanga (1.64%), and Tarlac (0.47%),” according to the report.

“Within Metro Manila, the withdrawal transactions by suspected money mules were done in Makati City (76.60% of total transactions in Metro Manila), Parañaque City (17.45%), City of Manila (2.98%), Quezon City (2.55%), and Pasay City (0.43%).”

“Given the seemingly rampancy of money mules in the country, the report highlights the need to raise awareness among the covered persons so that they may prevent money mules from taking advantage of the existing financial infrastructure,” the AMLC said.

“Likewise, the study finds value in educating the general public about the suspicious activities and notable typologies of money mules, so they may protect themselves from being victimized. Thus, the dissemination of this report to law enforcement agencies, supervising authorities, other government agencies, covered persons with Public-Private Partnership Agreement with the AMLC, other financial intelligence units, and the general public is recommended.”

According to the AMLC, a money mule is someone who, either intentionally or unintentionally, uses his or her bank account to transfer money on behalf of someone else, usually a cybercriminal.

Cybercriminals use these bank accounts for crimes such as money laundering or for transferring stolen money, which are prohibited under Republic Act 9160 or the Anti-Money Laundering Act of 2001. — Keisha B. Ta-asan

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