‘Drop bank accounts’ used by criminals to launder money

(InvestigateTV) — The Federal Trade Commission (FTC) received more than one million reports of identity theft in 2022.

Evidence Based Cyber Security Group Director Dr. David Maimon said one way criminals use stolen information is to open “drop bank accounts,” which they then use to launder money.

“The drop account is not new,” Maimon explained. “They have been around for quite a while, but what happened during the last six months or so is that we are seeing an increase in the volume of people who are willing to open those drop or mule accounts on your behalf, sell access to those accounts. Sell the plastic cards, debit cards that come with those accounts in order for you to start using them.”

Maimon said criminals love creating these accounts because they’re hard to track.

“We see that all over the country. We see identities, or citizens’ identities, being used to open and establish those bank accounts. Those criminals take advantage of at the end of the day, it’s very difficult to track, bank account that was opened under your identity. In the context of the credit line, it’s easier to detect that,” Maimon said. “These guys know how to fly under the radar very good. That’s why they open the bank accounts because they know there’s really no monitor on that.”

Kevin Donovan, vice president of new products with BioCatch, a fraud detection company, said consumers and organizations need to be aware that money mules and drop bank accounts exist.

Donovan said with advancements in technology, scammers are becoming savvier with how they create these accounts and how they steal your identity. He said that’s why it’s so important you look for red flags, like phishing attacks or ransomware and account takeovers.

Donovan suggested several ways for consumers to protect themselves against this type of fraud:

• Always be aware of the threat of identity theft
• Be wary of phone calls or emails from unknown senders
• Listen to your gut – if something feels off, it probably is
• When in doubt, call your bank directly to verify any requests or offers

To report fraud, go to the Consumer Financial Protection Bureau’s (CFPB) complaint center.

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