Case Notes
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Internet banking – fraud – ‘mule’ scam – money laundering – reversal of cleared funds
Miss Z – a university student – had answered an advertisement which she received in her email letterbox. The advertisement offered her the opportunity to earn $800 or more per week.
Miss Z responded to the email, and subsequently signed an elaborate and impressive looking employment contract as a “financial manager” providing “transaction services” for a German company claiming to be called Troy Communications Gmbh. Although this was not yet apparent to Miss Z, she had been ensnared in a classic “mule” scam whereby individuals unwittingly agree to facilitate the international transfer of stolen funds. The Troy Communications set up was more sophisticated than other “mule” cases that my office has seen in the past, with Miss Z even receiving telephone calls from a recruitment team and a company representative called Adolf. Miss Z was asked to log on to the Troy website, and had access to a manager’s panel which allowed 24 hour one to one contact. Once logged on to the manager’s panel she dealt with a woman answering to the name of “Magda”, whose photo was displayed on the panel. It was explained that her work would consist of receiving funds from Troy customers based in New Zealand into her personal bank account and then transferring them to other Troy clients using an international money order. Her commission would be 5% of the funds transferred.
As she had been advised by Adolf, the sum of $2,988 was paid into Miss Z’s account from another New Zealand bank account early in the morning of 29 March 2006. Following the directions given by Adolf, she immediately transferred the funds to a recipient in Russia by international money order. Such transfers are commonly made through companies such as Western Union. Adolf called her both before and after she had authorised the money order, in the latter case to confirm the reference details of the money order. During the afternoon of the same day Miss Z was advised by her bank that the funds transferred to her account had been reported as stolen – as it turned out, too late for her attempts to block payment of the money order to be successful. To add to Miss Z’s misfortune, her bank then reversed the transaction from her account, leaving it overdrawn by the amount of $2,988. With the advantage of hindsight, it is apparent that, if such scams are to be successful, the “mule” must be encouraged to transfer the funds out of the country with maximum speed.
When Miss Z requested her bank to repay the $2,988 which, in her view, had been unjustly withdrawn from her account, it declined to do so. When her efforts to resolve the matter with the bank proved unsuccessful, she made a formal complaint to my office.
My investigator contacted Miss Z’s bank, which examined her file and quickly established that the funds transferred to her account had been clearly flagged as cleared funds. Because the transfer had been designated as cleared, the bank had acted incorrectly in reversing the transaction in question. If the transfer had not been designated as cleared, it would have been a very different story.
Miss Z’s bank agreed to refund the $2,988, and also added $200 in compensation as a customer service gesture. The complaint was resolved on this basis.