The scam started as many scams do, with a phone call from someone impersonating a bank employee.
It ended with nearly 300,000 Australian dollars (about $288,000) being transferred out of a Melbourne woman’s bank account and withdrawn from automated banking machines.
Australia’s financial intelligence agency included the incident in a 2024 report to highlight a growing problem. After gaining access to the victim’s funds, the scammers transferred the money to 11 different bank accounts, most of which had been opened by international students from India. At the time when the cash was being withdrawn, the students had already returned home – which meant someone else was controlling their bank accounts, the Australian Transaction Reports and Analysis Centre said.
The students had, wittingly or unwittingly, become what are known as “money mules” – individuals who move illegally acquired funds on behalf of someone else.
Illegally acquired access to bank accounts is becoming a growing problem around the world, as criminal organizations look to move money they have stolen through increasingly pervasive scams.
Last November, the Australian Federal Police launched a campaign, called “Your Name. Your Responsibility,” to bring awareness to the global phenomenon. Members of organized crime groups have been approaching international students through social media platforms, messaging apps or in real life, offering between 200 to 500 Australian dollars for the use of their bank accounts, the police agency said. Sometimes the students receive a commission of around 10 per cent of the funds that flow through the account, as well.
For cash-strapped students who are studying in expensive countries, it can sound like an easy way to make some money – especially if they’re heading home and not planning to return. Many of them don’t realize they’re laundering money for cross-border scam operations.
Mr. McAllister says in some cases money mule targets may be entirely unwitting participants in the scam operations, instead believing they’ve been recruited for a new job.Alejandro Gomez Garcia/The Globe and Mail
“We see evidence that that is a persistent risk in our environment as well,” said Aaron McAllister, vice-president of fraud threat management at Bank of Nova Scotia.
“It can be somebody who’s entirely unwitting, where they believe that they’ve just got this great new work-from-home job, and all they have to do is process payments. But they’re told that as part of the job, they’re processing those payments on their own account, or an account that they’ve been instructed to open,” Mr. McAllister said.
The RCMP said it has encountered instances in which criminals have influenced international students to open accounts at Canadian banks, then used the accounts to facilitate money laundering and fraud.
Students and pedestrians walk through Toronto Metropolitan University's downtown campus. Money mule recruitment targeting students happens on campuses, through social media and even on dating apps.Fred Lum/The Globe and Mail
“Students are often targets for money mule recruitment,” Robin Percival, a spokesperson for the RCMP, said in a statement.
Sometimes, bank accounts are bought and sold online, in what amounts to a black market.
Montreal-based cybercrime research firm Flare Systems Inc. said it identified 4,337 posts offering or requesting verified Canadian accounts during a recent 12-month period. (Verified accounts are those that have had their ownership confirmed, making them less likely to get frozen by the bank than an account that has been stolen.) The vast majority of those posts – 3,828 of them – were on the messaging app Telegram.
“It’s increasing year on year,” said Adrian Cheek, a senior cybercrime researcher at Flare. “It’s not just the students who are leaving. It’s also a lucrative market for students who are here to generate extra income.”
Stuart Davis, financial crimes expert and president of Surpass Insights Inc., says scammers often prey on cash-strapped international students to obtain mule accounts.Alejandro Gomez Garcia/The Globe and Mail
Stuart Davis, a financial crimes expert who has held roles at three of Canada’s Big Five banks, said the rising prevalence of scams and fraud is driving a growing need for mule accounts.
Fraud victims reported more than $704-million in losses to the Canadian Anti-Fraud Centre last year. Those losses, which are believed to represent just 5 to 10 per cent of all fraud, surpassed the $645-million reported to the agency in 2024.
“The mule account business is a revolving-door business, because very seldom can you reuse the same account more than a few times,” said Mr. Davis, president of Surpass Insights Inc., an advisory firm that is focused on anti-money-laundering, fintech and artificial intelligence.
“They’re always having to harvest new mule accounts. So, that’s why they prey on the students; that’s why they prey on the vulnerable.”
In 2019, a sergeant from the RCMP’s Greater Toronto Area financial crime unit wrote a report that addressed the operations of telephone and cyber-enabled scams.
The report, which was cited in a 2024 Immigration and Refugee Board of Canada ruling, noted that the masterminds of a “tech scam” that originated from call centres in India often used international students as mules to move fraudulently obtained money.
International students are not the only targets for money mule recruitment, which happens on campuses, through social media and even on dating apps. But they are often in need of cash, which can make the offer appealing, and they are sometimes tricked into moving money by fake job ads or promises of immigration assistance.
“English is probably the second language. They’re isolated from their support network at home. Australia is a very expensive country and the syndicates are very acutely aware of how young people communicate, so they have very realistic social media advertising,” said Acting Superintendent Chris Jessop, who is in charge of the Joint Policing Cybercrime Coordination Centre for the AFP.
The RCMP said it has encountered instances in which criminals have influenced international students to open accounts at Canadian banks, then used the accounts to facilitate money laundering and fraud.DARRYL DYCK/The Canadian Press
Jatin Chahal, an Indian citizen studying in Canada who was accused of acting as a money mule in a scam centred around the Canada Revenue Agency in 2020, said he didn’t realize he was involved in criminal activity.
“I was in need of money and ... I got misleaded,” Mr. Chahal testified, according to a 2021 decision by the Immigration and Refugee Board of Canada.
Mr. Chahal said he believed he was doing a job for a man named Samir. The job involved receiving packages of cash and either handing them off to another individual or transferring them into a U.S. bank account.
The tribunal determined that there were reasonable grounds to believe that Mr. Chahal was a member of a criminal organization, and issued a deportation order against him. But it said there was insufficient evidence that he’d engaged in the crime of money laundering.
Another student from India, Ravi Shah, said he was seeking job opportunities and permanent residency in Canada when he placed his personal documents inside a package he’d received and mailed it to what he thought was a lawyer’s address in Brampton, Ont.
Mr. Shah, who came to Canada in 2019 to study at Fanshawe College in London, Ont., testified that he didn’t look inside the package, which contained $15,000 from a victim of a scam based on Microsoft Corp. technology. He believed the envelope contained sensitive information about other candidates, according to a 2024 decision by the immigration board.
“I was told it was confidential, not to open it,” said Mr. Shah, who has been accused of acting as a money mule in the scam. Organized crime groups may use mules to mail cash to various addresses as a way of obfuscating the original source of the funds.
The tribunal decided not to deport Mr. Shah, finding that the Minister of Public Safety and Emergency Preparedness had “failed to establish on reasonable grounds to believe that Mr. Shah is a member of an organized crime group.”
'The mule account business is a revolving-door business,' Mr. Davis says, 'because very seldom can you reuse the same account more than a few times.'Alejandro Gomez Garcia/The Globe and Mail
Regardless of whether mules are knowingly participating in criminal activity or not, identifying and shutting down their accounts poses a continuing challenge for banks.
“It’s pretty persistent and common,” said Mr. Davis.
AI may be able to help. The technology has been blamed for enabling fraud, for instance by creating increasingly realistic deep fakes, but it’s also helping financial institutions tackle scams.
At Scotiabank, AI is being deployed to detect fraudulent activity, including to identify mule accounts, Mr. McAllister said.
“We’ve got an in-house team of data scientists that work on developing these types of models to make sure that we’re identifying fraud when it happens,” Mr. McAllister said.
Scotiabank uses tools such as graph-based machine learning to identify and take down networks of mule accounts, and the bank monitors changes in behaviour that could indicate an account has been co-opted by criminals.
The moment when an account goes from making ordinary transactions, such as paying rent or buying groceries, to quickly sending and receiving large sums of money is referred to as a bust-out, according to Mark Hines, head of product, fraud at Interac Corp.
The financial services industry has been working with predictive modelling to try to spot accounts that are at risk of pivoting to criminal activity, Mr. Hines said.
“Trying to find the data that gives you the warning signal, that’s sort of the magic sauce that everyone is looking for right now,” he said.
Mark Hines, head of product, fraud at Interac, says the financial services industry has been working with processes like predictive modelling to identify accounts that are at risk of pivoting to fraud.Alejandro Gomez Garcia/The Globe and Mail
Other banks have systems in place, too. Mathieu Genest, a spokesperson for Canadian Imperial Bank of Commerce, said the bank has “sophisticated layers of security and monitoring that work effectively to help prevent the fraudulent use of accounts.”
The other three Big Five Canadian banks declined to comment.
In Australia, there are two cases currently before the courts involving money mules, Supt. Jessop said. In one of those cases, six out of the seven people accused of recruiting international students, primarily from China, to move dirty money have pled guilty. The alleged head of the syndicate has pled not guilty and is going to trial, Supt. Jessop said.
It’s difficult to quantify the effectiveness of the AFP’s awareness campaign.
“We can’t put metrics behind it, but we think it’s having a good effect,” said Supt. Jessop.
“If we’re getting the message out there and we’re preventing people from becoming victims, that’s where we want to be.”